08:51 AM EST, 11/18/2021 (MT Newswires) -- Oil edged higher early on Thursday, recovering from overnight trading where prices touched six-week lows following reports that China is releasing oil from its strategic reserves.
West Texas Intermediate (WTI) crude for December delivery was last seen up US$0.12 to US$78.48 per barrel after earlier touching US$77.08. January Brent crude, the global benchmark, was up US$0.25 to US$80.53.
WTI crude dropped 7.4% since touching a multi-year high of US$86.65 on October 26. The price is correcting on worries that the Biden Administration will follow through on plans to release supply from the U.S. strategic petroleum reserve to lower gasoline prices. As well, Bloomberg on Thursday reported China is releasing some of its own strategic reserves following a virtual summit meeting between U.S. President Joe Biden and his Chinese counterpart Xi Jinping where the topic was discussed.
"Prices are coming under increasing pressure as the debate about the possible release of strategic oil reserves gains momentum. The US now wants to persuade other leading consumer countries such as Japan, South Korea, India and China to tap into their emergency reserves. A concerted approach would certainly have a greater impact on the oil market than if the US embarked on this path on its own," Commerzbank analyst Carsten Fritsch said in a note.
Along with potential action to curb prices from the world's oil consuming countries, the International Energy Agency said in its influential monthly Oil Market Report released earlier this week that it expects prices to moderate as U.S. production rises.