According to Kyle Shostak, director of the American investment company Navigator Principal Investors, gasoline in the United States will fall by 5-15 cents after the measures taken by the authorities.
The use by the United States of 50 million barrels of oil from the country’s strategic reserve is too insignificant for the world market; the American authorities should use at least twice as much in order to influence energy prices. This opinion was expressed by Kyle Shostak, director of the American investment company Navigator Principal Investors.
As the expert noted, this decision “in itself is quite unprecedented,” given that, in addition to a number of countries, it was supported by China, despite the difficult relations between the United States and China. “It seems to me, however, that the market will require much more serious volumes of such sales in order to have a more or less long-term effect. <…> In order for the market to see a significant reduction in prices or at least their stabilization, at least 100-130 million barrels released for sale are required,” Shostak said, adding that the effect on the market from the release of 50 million barrels of oil will be very short-term.
The investor noted that the United States “certainly can afford” to use more than 100 million barrels due to the largest oil reserves, which currently exceed 600 million barrels. According to Shostak, in the United States, after the measures taken by the authorities, gasoline will fall in price by 5-15 cents, but even such a price reduction “is unlikely to last long.”
On Tuesday, the White House announced the decision of U.S. President Joe Biden to release 50 million barrels of oil from the country’s strategic reserve. As stated in the statement, this is done in order to reduce fuel prices for Americans and in order to balance supply and demand in the market after the coronavirus pandemic.