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<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106905973-1625223614118-gettyimages-1232575215-OIL_DEMAND-1.jpeg" alt="" class="wp-image-413696" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106905973-1625223614118-gettyimages-1232575215-OIL_DEMAND-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106905973-1625223614118-gettyimages-1232575215-OIL_DEMAND-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106905973-1625223614118-gettyimages-1232575215-OIL_DEMAND-1-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Oil well pump jacks operated by Chevron Corp. in San Ardo, California, U.S., on Tuesday, April 27, 2021. David Paul Morris | Bloomberg | Getty Images</figcaption></figure>



Oil prices could climb higher despite the U.S. and other major consumers releasing millions of barrels of oil from their reserves to try to keep energy prices down, one analyst told CNBC.



“It’s not going to work simply because the strategic petroleum reserve — any country’s strategic petroleum reserve is not there to try to manipulate price,” Stephen Schork, editor of the Schork Report, said Wednesday on CNBC’s “<a href="https://www.cnbc.com/asia-squawk-box/">Squawk Box Asia</a>.”



Strategic petroleum reserves exist only to offset short-term, unexpected supply disruptions, he explained.



“There’s a considerable amount of bets out there that we will see $100 a barrel oil,” Schork said, adding it could happen as early as the first quarter of next year, especially if there is a cold winter in the Northern Hemisphere.



<h2 class="wp-block-heading" id="h-calming-oil-prices"><a></a>Calming oil prices</h2>



Oil prices have jumped more than 50% this year, with demand outstripping supply as more countries emerge from national lockdowns and severe restrictions imposed since last year due to the pandemic. Resumption of international travel as more nations re-open borders is also boosting jet fuel demand.



Global benchmark <a href="https://www.cnbc.com/quotes/@LCO.1">Brent</a> surpassed the psychologically key threshold of $80 per barrel in October and prices have held near that level. As of Wednesday afternoon in Asia, the international contract traded near $82.50.



U.S. President&nbsp;<a href="https://www.cnbc.com/joe-biden/">Joe Biden</a>&nbsp;announced Tuesday that the U.S.&nbsp;<a href="https://www.cnbc.com/2021/11/23/biden-says-us-will-tap-strategic-petroleum-reserve-as-gas-prices-hover-around-7-hear-high.html">will release 50 million barrels from its reserves</a>&nbsp;as part of a global effort by energy-consuming countries to calm the rapid rise in fuel prices. Of that total, 32 million barrels will be an exchange over the next few months, and 18 million barrels will be an acceleration of a previously authorized sale.



Other countries that made the joint commitment include China, India, Japan, South Korea and the United Kingdom.



So far, the U.K. has&nbsp;<a href="https://www.bbc.com/news/business-59353194" target="_blank" rel="noreferrer noopener">agreed to release about 1.5 million barrels</a>&nbsp;while India&nbsp;<a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1774288" target="_blank" rel="noreferrer noopener">committed to 5 million barrels</a>. China, Japan and South Korea have yet to announce specific numbers.



“We are talking 50 million barrels coming out of the United States, potentially another 50 from our partners. That’s 100 million barrels of oil — that is one day’s worth of a global demand for crude oil,” Schork said.



Vivek Dhar, a mining and energy commodities analyst at the Commonwealth Bank of Australia, was more conservative in his estimates. He predicted in a Wednesday note that the number of barrels released by the six oil-consuming countries could amount to “just north of 70 million,” as the release of oil stockpiles from the other countries may be “relatively tame.”



The world consumed 97.53 million barrels of oil per day this year, up from 92.42 million barrels a day in 2020,&nbsp;<a href="https://www.eia.gov/outlooks/steo/report/global_oil.php" target="_blank" rel="noreferrer noopener">according to the U.S. Energy Information Administration</a>. In 2022, that figure is set to rise to 100.88 million barrels a day.



“It is a clear sign of desperation that this is the only tool in the box and it is not going to work. I do believe the market will call the U.S.’s bluff on this and we’re likely to see higher prices rather than lower prices one month from now,” Schork said.



The U.S. should consider bringing American producers to the table and ask them to ramp up output to offset the supply imbalance, he added.



Commonwealth Bank’s Dhar said a rebound in oil prices on Tuesday indicated that “markets were underwhelmed with the co-ordinated release of strategic oil reserves.”



<h2 class="wp-block-heading"><a></a>Showdown with OPEC+</h2>



The latest development came after OPEC and its oil-producing allies&nbsp;<a href="https://www.cnbc.com/2021/11/04/opec-agrees-to-stick-to-oil-production-plan-defying-us-pressure.html">decided not to pump more oil</a>&nbsp;despite crude prices climbing to multi-year highs and U.S. pressure to help cool the market.



Under its current output plan, the group, known as OPEC+, will gradually increase oil production by 400,000 barrels per day each month. They are due to meet again next month.



“There have, as of yet, been no signs that OPEC+ is reconsidering its plan,” Eurasia Group analysts said in a note dated Nov. 22, prior to Biden’s announcement overnight. A large-scale stock release by oil consumers before OPEC+ meets may prompt a countermove by the group, resulting in a “disruptive standoff,” they said.



“Under such conditions, countervailing moves by each side are likely to lead to increased volatility, producing seesawing oil prices and added uncertainty,” the Eurasia Group analysts said.



“This would neither alleviate consumer price pressure nor give producers the required stability to ensure steady and reliable supply to a global economy that is still grappling with the worst pandemic in a century,” they added.

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<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency.jpeg" alt="" class="wp-image-413505" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106950027-16330001642021-09-30t110408z_12355870_rc2b0q9hz3vr_rtrmadp_0_usa-fed-digital-currency-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Representations of virtual currency Bitcoin are placed on U.S. Dollar banknotes in this illustration taken May 26, 2020. Dado Ruvic | Reuters</figcaption></figure>



U.S. Deputy Treasury Secretary Wally Adeyemo said that the dollar will continue to be the world’s dominant currency despite increasing interest in cryptocurrencies.



“One of the things that we know is that digital assets present an opportunity in lots of ways for the economy, but potentially it presents challenges,” Adeyemo told CNBC’s Hadley Gamble on Tuesday in Abu Dhabi, the United Arab Emirates.



“We know that digital assets have the ability to be used by those who want to illicitly move money through the system in a way that doesn’t touch the dollar and that we can’t see as easily. But we do think that ultimately working together with countries around the world, we can address this risk by calling on the creators of digital assets to follow the rules around anti-money laundering more closely.”



“Ultimately the thing that is going to drive the dollar’s position in the world are the decisions we make in America about investing in our economy. The reason that people are involved in the dollar-based economy … is because they want to invest in America,” he continued.



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Adeyemo said it was because of policy decisions, such as the $1 trillion infrastructure package signed into law on Monday, that would help to “unlock the potential” of the U.S. economy and create investment opportunities for other governments.



“As our economy grows, it is an opportunity for the global economy to grow and as that happens, the dollar will remain the dominant currency in the world as well,” he said.



His view echoed comments made by St. Louis Federal Reserve President James Bullard earlier this year, who dismissed bitcoin and other digital assets as a serious threat to the dollar’s position as the world’s reserve currency.



<h2 class="wp-block-heading" id="h-sanctions-policy"><a></a>Sanctions policy</h2>



Russian Central Bank Governor Elvira Nabiullina said last week that it would launch a prototype of the digital ruble platform early next year, according to Reuters. Nabiullina said Russia would undergo a pilot test before making a final decision on the launch of the digital currency.



Speaking to CNBC in early June, Nabiullina said she expected digital currencies to play a pivotal role in the future of financial systems as the economy moves online.



Many central banks around the world are developing sovereign digital currencies, which advocates say could promote financial inclusion and make cross-border transactions easier.



When asked whether the prospect of a digital ruble could make U.S. sanctions less effective, Adeyemo replied: “We believe that even if a digital ruble or other digital currencies come into place, there will still be scope for our sanctions to have an impact on their economies simply because the global economy is still inter-connected.”



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“Companies in Russia still do a great deal of business around the world. A lot of that business is done in dollars, it is done with American financial institutions and that is because the American economy remains the biggest economy in the world,” he said.



“As long as that is the case, and as long as we make the investments that are needed, we are still going to have the ability to use our sanctions regime to make sure that we prevent the thing that it was created to prevent, which is illicit finance through the system and also to hold people accountable who take steps that are not considered in our national security.”



Washington has imposed sanctions on Russia for several reasons in recent years, from the suspected poisoning of opposition politicians to election interference and cyberattacks.



Adeyemo’s comments add to a report in October from the Treasury which there could be some impact on U.S. sanctions from cryptocurrencies. He reportedly told a Senate committee last month: “The advent of cryptocurrencies makes it harder for sanctions to be effective.”



— CNBC’s Abigail Ng contributed to this report.



Correction: This story has been updated to remove an incorrect reference to where U.S. Deputy Treasury Secretary Wally Adeyemo was speaking.

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<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin.jpeg" alt="" class="wp-image-413479" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A representations of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken May 19, 2021. Dado Ruvic | Reuters</figcaption></figure>



<a href="https://www.cnbcafrica.com/quotes/btc=x/">Bitcoin</a> and other cryptocurrencies fell sharply on Tuesday retreating from near-record highs.



Bitcoin fell toward $60,000 during late morning trade Singapore time, according to CoinDesk data. It recovered some of those loses and was trading at around $60,600.10 at 2:42 p.m. Singapore (1:42 a.m. ET) , down nearly 8% from 24 hours before.



<a href="https://www.cnbcafrica.com/quotes/eth=x/">Ether</a>, meanwhile, fell nearly 8% to $4,310.96.



The impetus behind the price movement was not clear.



China’s state planner, the National Development and Reform Commission (NDRC), said during a press conference Tuesday that it will continue to clean up virtual currency mining in the country.



Earlier this year, China cracked down on bitcoin mining leading to an exodus of miners. Mining is the energy-intensive process which both creates new coins and maintains a log of all transactions of existing digital tokens. 



Beijing is concerned about the amount of energy being used by mining.



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Mining “causes large energy consumption and carbon emission. It has no active impact to lead industry development or scientific progress,” NDRC spokesperson Meng Wei said on Tuesday, according to a CNBC translation of her Mandarin comments.



“Regulating cryptocurrency mining activities has significant meaning in optimizing our industrial structure, saving energy and cutting emission, achieving carbon emission and neutrality goals.”



Chinese President Xi Jinping said last year that China aims to achieve carbon neutrality by the year 2060.



The NDRC said it will focus on state-owned companies involved in cryptocurrency mining. It also said it is considering imposing “punitive electricity prices” against those participating in cryptocurrency mining activities but paying a residential electricity price.



China’s authorities have been focusing on wiping out bitcoin mining since earlier this year.



Negative crypto-related comments from Chinese authorities have often led to a sell-off in digital coins, even if those comments are not overly new.



<h2 class="wp-block-heading" id="h-pullback-from-record-highs"><a></a>Pullback from record highs</h2>



The retreat in cryptocurrency prices also comes as many of them hit all-time highs in November.



Bitcoin reached a record high of $68,990.90 on Nov. 10 with ether following suit on Nov. 11.



“I think we’re seeing a healthy pullback after a 7 week rally from 40K to 69K, which is normal in an upward trend,” Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, told CNBC via email.

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<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106975931-1637040679407-gettyimages-1236590823-AFP_9RQ4CT.jpeg" alt="" class="wp-image-413470" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106975931-1637040679407-gettyimages-1236590823-AFP_9RQ4CT.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106975931-1637040679407-gettyimages-1236590823-AFP_9RQ4CT-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/11/106975931-1637040679407-gettyimages-1236590823-AFP_9RQ4CT-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>US President Joe Biden meets with China’s President Xi Jinping during a virtual summit from the Roosevelt Room of the White House in Washington, DC, November 15, 2021. Mandel Ngan | AFP | Getty Images</figcaption></figure>



BEIJING — U.S. President Joe Biden and Chinese President Xi Jinping met virtually Tuesday in the closest communication between the two countries’ leaders since Biden took office in January.



Both sides noted points of tension, and issued public statements after the meeting that emphasized ways to avoid conflict.



Biden said there was a “need for common-sense guardrails to ensure that competition does not veer into conflict and to keep lines of communication open,” according to White House readout after the meeting.



Xi said during the meeting that for China and the U.S. to get along “in a new era,” three principles of mutual respect, peaceful coexistence and win-win cooperation should be followed, according to China’s official English-language readout. Beijing typically uses language like “mutual respect” in calling for more favorable terms from the U.S.



Xi also compared the two countries to two large ships, which need to move forward together without colliding, according to a Chinese release.



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“The meeting itself was really about the two leaders discussing ways to manage the competition between the United States and China responsibly,” a senior Biden administration official told reporters in a call.



On Taiwan, there was “nothing new established in the form of guardrails or other understandings,” the official said adding that the Beijing Winter Olympics and visa issues did not come up during the virtual meeting. “We were not expecting a breakthrough. There were none to report,” the official said.



“The meeting [was] wide-ranging, in-depth, candid, constructive, substantive and productive,” Foreign Ministry Spokesperson Hua Chunying said in English on Twitter. “It helps increase mutual understanding.”



As expected, economic issues were part of the two leaders’ conversation, without any specific conclusions.



Biden “underscored the importance of China fulfilling its Phase One [trade deal] commitments,” the official said, adding that trade was not a dominant part of the conversation.



<h2 class="wp-block-heading" id="h-u-s-china-tensions"><a></a>U.S.-China tensions</h2>



Tensions between the two nations escalated under former U.S. President Donald Trump, beginning with trade and tariffs on billions of dollars’ worth of goods.



The leaders ended the meeting shortly before 12:30 p.m. Beijing time (11:30 p.m. ET Monday), almost four hours after it began, according to Chinese state media.



The virtual meeting kicked off with a positive tone and cordial remarks. Xi said he was “very happy” to see his “old friend,” while Biden said the two “have never been that formal with one another,” according to a White House readout of the meeting’s opening remarks.



Biden said the leaders’ responsibility was “to be clear and honest where we disagree, and work together where our interests intersect, especially on vital global issues like climate change.”



“Our responsibility as leaders of China and the United States is to ensure that the competition between our countries does not veer into conflict, whether intended or unintended,” the U.S. president said. “Just simple, straightforward competition.”



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Both leaders said it would be better to meet in person, and called for increased communication.



The Chinese leader also “expressed his readiness to work with President Biden to build consensus and take active steps to move China-US relations forward in a positive direction,” according to China’s Ministry of Foreign Affairs. Xi emphasized the necessity of a “sound and steady” relationship between the two countries, the press release said.



China’s Vice Premier Liu He, Foreign Minister Wang Yi and Vice Foreign Minister Xie Feng joined the virtual meeting, along with Ding Xuexiang, director of the general office of the CCP’s central committee, and Yang Jiechi, director of the committee’s foreign affairs office.



On the U.S. side, attendees included Treasury Secretary Janet Yellen, Secretary of State Antony Blinken and National Security Advisor Jake Sullivan. Three representatives from the National Security Council also joined: Kurt Campbell, deputy assistant to the president and coordinator for the Indo-Pacific; Laura Rosenberger, special assistant to the president and senior director for China; and Jon Czin, director for China.

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