- Oil reverses yesterday’s gains amid additional SPR releases and demand concerns
- March ’23 WTI lost nearly $1.20 this morning to trade around $79/Bbl
- Biden administration yesterday announced plans to release more oil from SPR
- Inflation data on Tuesday showed that the US CPI was 6.4% in January, a slight deceleration from December but still more than the 6.2% economists expected (WSJ)
- Market remains concerned that the new inflation data could push the Fed to turn more hawkish with its interest rate policies
- Biden administration plans to sell an additional 26 MMBbl of crude from the Strategic Petroleum Reserve to fulfill a 2015 budget mandate (BBG)
- The sale is scheduled between April and June, and following this latest release, the reserve will drop to about 345 MMBbl, the lowest level since 1983
- Biden officials decided to withdraw 180 MMBbl from the strategic reserve in an effort to ease supply issues after Russia invaded Ukraine last year
- About 140 MMBbl of the other congressionally mandated releases scheduled for the fiscal years 2024-2027 were canceled after lawmakers passed a provision in a budget bill in December
- Previously, Biden officials have spoken with energy companies about purchasing oil to refill the SPR when oil prices approach levels around $70/Bbl
- The sale is scheduled between April and June, and following this latest release, the reserve will drop to about 345 MMBbl, the lowest level since 1983
- UAE is worried about an oil supply shortage in 2024 (BBG)
- Oil supplies will be a bigger problem than demand for international markets in 2024 as some countries struggle with production and under-investment, according to the UAE’s Energy Minister Mazrouei
- Mazrouei added that the market is “balanced” for this year and has enough “volumes” to meet demand growth
- His comments follow OPEC+ Secretary General Al-Ghais’ warning that the market is suffering from a "chronic" lack of investment