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US President Joe Biden’s use of the Strategic Petroleum Reserve to blunt surging energy prices threatens to inflate OPEC’s sway over global oil markets, said Bank of America Corp.’s Francisco Blanch.
In the wake of the OPEC+ alliance’s decision to slash production limits by 2 million barrels a day, the White House has few options remaining to head off higher prices and their impact on consumers, Blanch, the bank’s head of global commodities and derivatives research, told Bloomberg Television on Thursday.
One of those options -- selling or loaning more crude from the strategic reserve -- may prove counterproductive for the US in the long run, he warned.
“I don’t think it’s a great idea given the incredibly tense geopolitical world we live in today,” Blanch said. By depleting the reserve, the US puts itself “more in the hands of OPEC+,” and “eventually you’re just ceding more and more market control.”
Brent crude traded 0.3% higher at $93.66 a barrel at 3:18 p.m. in London after earlier rising as much as 1.2%. For the year, the international benchmark has risen 20%.
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