Letter from Houston: Omicron moves the dial

Covid-19 variant sends oil price tumbling as SPR release makes little impact

US president Joe Biden’s long-heralded announcement on 23 November that the country would release 50mn bl of crude from its Strategic Petroleum Reserve (SPR) had only a small impact on crude prices, mainly because the market quickly worked out that the headline figure was somewhat misleading. Similar vague announcements from the UK (which has no SPR) and several Asian allies did not impress market participants either. Firstly, 18mn bl of the volumes released by the US were already planned to be sold by end-2022, as required by Congress. And secondly, the remaining 32mn bl—although genuinely new volumes—will be put on the market on an exchange basis, being released gradually over four months