Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil up as Report Recants Talk of U.S. Reserve Sale or Export Ban

CommoditiesOct 07, 2021 14:18
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Barani Krishnan

Investing.com - Oil clawed back Thursday’s early losses and a chunk of the previous session’s slide on a report that the U.S. government was not planning to sell crude from its emergency reserves nor ban exports of the commodity to contain runaway fuel prices and inflation.

U.S. crude’s West Texas Intermediate benchmark was up 85 cents, or 1.1%, at $78.28 per barrel by 1:55 PM ET (17:55 GMT).

London-traded Brent crude, the global benchmark for oil, was up 86 cents, or 1.1%, at $81.94.

Both crude benchmarks fell about 3% earlier in the day, extending Wednesday’s 2% drop, as the trade worried about the impact of a crude sale from the Strategic Petroleum Reserve as well as the reimposition of a four-decade ban of U.S. oil exports lifted in 2015.

The concerns arose after Energy Secretary Jennifer Granholm cited the so-called SPR sale and export ban as among tools the government had to battle a supply and price crisis in oil now. Granholm made the remarks at an industry event hosted by the Financial Times on Wednesday.

A Bloomberg reporter following up on the FT story, however, tweeted out mid-morning Thursday that the U.S. Department of Energy was not considering tapping into its SPR "at this time", nor pursuing a ban on oil shipments. Oil bulls immediately chased prices higher on the Bloomberg tweet.

“Energy traders initially thought that perhaps the Biden administration was panicking and wanted to tap the SPR a lot sooner than warranted,” Ed Moya, an analyst at OANDA, said, referring to the back-and-forth on the SPR sale and export ban story. “The oil market is still heavily in deficit and that will likely be the story over the winter.”

The SPR, located near the US Gulf of Mexico, is the world’s largest emergency stockpile of crude oil. Managed by the US Department of Energy, the reserve contained 617.8m barrels of oil last week — equal to about a month of US petroleum products demand.

The last big release from the reverse was in 2011, when the Obama administration worked with other International Energy Agency members to tap emergency stocks to bring down soaring prices then. The US Congress has also authorized periodic sales from the SPR to raise government revenue.

Exports of US crude oil have been unfettered since Congress lifted federal shipment restrictions in 2015, with the country sending out anywhere between 2.0 million and 3.0 million barrels per day to China and other locations.

The average price of petrol at US pumps is hovering at $3.19 a gallon — the highest in seven years — with the White House fearing that the rise in fuel costs could damage the administration’s political prospects ahead of the midterm elections next year.

Global crude prices, represented by WTI and Brent, are, meanwhile, up about 60% on the year.

Oil prices also came under pressure on Wednesday after a second straight build in weekly stockpiles of U.S. crude.

Crude stockpiles rose by 2.35 million barrels in the week to October 1, following through with the 4.58-million build in the previous week to September 24, the Energy Information Administration said in its Weekly Petroleum Status Report. 

Aside from the crude build it reported, the EIA raised its production estimates for U.S. crude to 11.3 million barrels per day for the week to October 1 from a previous 11.1 million daily. 

The EIA said gasoline inventories rose by 3.26 million barrels during the week to October 1, versus the forecast build of 400,000 barrels. In the previous week, stockpiles of the motor fuel rose by 3.48 million.

Inventories of  distillates, which include diesel and heating oil, fell by 396,000 barrels in the latest week against an expected deficit of 750,000, data showed.

 

Oil up as Report Recants Talk of U.S. Reserve Sale or Export Ban
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email