The price of the ICE Brent futures for December delivery is reported to have gone above $50/b later on Tuesday in London. In particular, on Tuesday evening, the price hit $50,1 per barrel, which is 2,69% above the previous close price, Masterforex-V Academy reports.
However, according to the latest report provided by Bloomberg, the forthcoming U.S. oil inventories report scheduled for today is probably going to indicated an increase on the oil inventories over the period of October 23rd through 30th. If that’s the case, this news alone may trigger a price drop in the global market of crude oil
At the same time Die Welt reports that the USA has started a global oil war.
The USA vs Russia, Saudi Arabia vs the USA etc. The oil war is underway. The world’s major oil exporters are fighting for their share in the international market. Yet there are many of those who will benefit from those currency wars, especially oil importers.
As for the U.S. “weapons” used in this oil war, they can be found in Texas and Louisiana inside 4 former salt mines, 1000 meters under. This means that the Mexican Gulf contains strategically important oil reserves – some 700 million barrels of crude oil. This is enough to cover the U.S. oil needs for 35 days in a row. The thing is that strategic reserves are used only during force-majeure like situations when the hurricane destroyed dozens of oil rigs in 2005.
Still, these reserve may be used as an assault weapons in this oil war. The thing is that the USA is planning to put 8% of its entire oil reserves to the international market. Since 2018, they are going to sell 5 million barrels a year. In 2023, these figures are expected to be increased all the way up to 10 million barrels a year. By 2025, the USA is planning to export some 60 million barrels of crude oil.
When sold, this amount of crude oil is expected to cover the amount of money required to balance the U.S. budget. Still, if oil prices stay that low over the next 10 years, the U.S. government will only be able to make some $3 billion, which is nothing compared to the $18000bn debt the country has.
This leads us to believe that the USA is up to something when trying to sell the oil. Some experts say that when announcing such a plan to sell around 60 million barrels of crude oil over the next 10 years, the U.S. government is kind of trying to press the oil prices in order to undermine the oil-exporting economies like Russia, Saudi Arabia and Iran. That is why we can call it an evidence that another commodity war is underway.
There is another point of view on why Washington wants to sell some of tis oil today, when oil prices are still crashing? Maybe it is not about economics and finances alone. There might be the geopolitical side of the matter. The thing is that Washington is planning to expand the military part of the budget by $50 billion within the next 2 years. With that said, the oil sale may well be designed to cover those expenses.
