Goldman Sachs says global oil reserves release ‘a drop in the ocean’

A coordinated release from government oil reserves led by the United States may add about 70 million to 80 million barrels of crude supply, smaller than the more-than-100 million barrels the market has been pricing in, analysts at Goldman Sachs said.

“On our pricing model, such a release would be worth less than $2/bbl, significantly less than the $8/bbl sell-off that occurred since late October,” the bank said in a note titled “A drop in the ocean”, dated Nov. 23.

Global oil prices rebounded to a one-week high on Tuesday after the move by the United States and other consumer nations to release oil from strategic petroleum reserves (SPR) to try to cool the market fell short of some expectations.