Tokyo, 24 November, /AJMEDIA/
The United States will release 50 million barrels of oil from its emergency reserves in coordination with other major energy-consuming countries such as Japan and China to address rising prices, the White House said Tuesday.
Japanese Prime Minister Fumio Kishida said Wednesday morning in Tokyo that his country will release oil in what would be the first tapping of oil reserves in an attempt to lower prices by the resource-poor nation.
“Japan has decided to act in tandem with the United States and sell a portion of the state-owned stockpiles in a manner that does not violate the oil stockpiling law,” which limits release to such purposes as response to disasters and political turmoil overseas, said Kishida.
“The stability of crude oil prices is a very important issue in realizing economic recovery from the coronavirus pandemic,” he added. So as not to violate the law, Tokyo plans to release reserves in excess of its target of storing oil worth 160 days of consumption.
Despite the decision by the countries, oil prices continued to rise in New York overnight and in Tokyo amid doubts about the effectiveness of the move as the amount of oil they are to release is only worth several days of consumption.
In New York on Tuesday, the benchmark West Texas Intermediate crude for January delivery rose $1.75 from Monday to $78.50 per barrel.
At the Tokyo Commodity Exchange on Wednesday, Middle East crude oil futures sharply rebounded, with its benchmark briefly rising by 3,280 yen per kiloliter to 55,240 yen, its highest level in roughly two weeks.
The U.S. announcement followed weeks of consultations with countries around the world, the White House said, as surging prices of gasoline and other fuel products have hit households and companies already struggling with the impact of the coronavirus pandemic.
India, South Korea and Britain are also among the countries taking action.
