- Oil hovers near a 15-month low after plunging $9.07, or 12%, over the past three days
- April ’23 WTI lost 30c this morning to trade at $67.31/Bbl
- Last week’s collapse of SVB, in addition to turmoil at Credit Suisse, continues to weigh on market sentiment
- Concerns with the banking system have eclipsed bullish expectations for a revival in Chinese demand
- A wave of technical selling and options coverage also accelerated the three-day selloff
- A relatively stronger U.S. dollar has also been adding pressure to prices. This makes oil more expensive for buyers holding other currencies
- Crude futures were largely unaffected following the EIA storage data, which showed increases in crude stocks along with crude product draws
- Oil’s downturn raises the prospect that the U.S. would try to refill the SPR (BBG)
- Falling crude prices have raised expectations that the U.S. may attempt to replenish the SPR once again
- The Biden administration laid out plans to refill the SPR if crude prices trade around $70/Bbl
- WTI tumbled to nearly $66/Bbl on Wednesday
- The SPR is currently at 371.6 MMBbl, the lowest level since the 1980s, as a result of the 180 MMBbl release last year to tame gasoline prices
- Additionally, the deliveries that followed the sale of 26 MMBbl from the DOE's reserves have not yet been completed. These deliveries are scheduled to take place from April to June