Q1. Oil skid on concerns of rising surplus in

SINGAPORE: Prices fell more than 1% on Friday on concerns of rising global supply surpluses in the first quarter following a coordinated release of crude reserves among major consumers led by the United States.

Brent crude futures extended the decline for the third session, falling 96 cents, or 1.2%, to $81.26 a barrel by 0130 GMT. US West Texas Intermediate (WTI) crude was down $1.35, or 1.7%, at $77.04 a barrel. There was no settlement for WTI on Thursday due to the Thanksgiving holiday.

US President Joe Biden’s administration on Tuesday announced plans to release millions of barrels of oil from strategic reserves in coordination with other big consuming countries, including China, India and Japan, to try to cool prices.

According to the findings of a panel of experts advising ministers of the Organization of the Petroleum Exporting Countries (OPEC), an OPEC source said such a release is likely to boost supplies in the coming months.

The Economic Commission Board (ECB) expects a 400,000 barrel-per-day (bpd) surplus in December, rising to 2.3 million bpd in January and 3.7 million bpd in February, the OPEC source said.

Forecasts of rising surplus oil clouded the outlook for a meeting between OPEC and allies, known as OPEC+, on December 2 to decide on immediate output. The group is yet to decide whether it will continue to increase production by 400,000 bpd in January.

Still, the benchmark contracts are set to post their first weekly gains in nearly a month as the total volume of crude reserve releases was lower than market participants estimated at 70 million to 80 million barrels.

“Since the volume is low, I think the aim is to reduce the consolidation in supply rather than have a big impact on the oil markets,” Petroleum Association of Japan (PAJ) president Tsutomu Sugimori told reporters late Thursday.

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