Crude oil futures prices closed lower on Tuesday (18th), as talk of the U.S. will release the Strategic Petroleum Reserve (SPR) once more, coupled with continued market worries that a recession might weaken energy demand, further dragging oil prices down to the lowest in more than two weeks point.
energy commodity prices
- Delivered in November WTI CrudeFutures fell $2.64, or 3.1 percent, to settle at $82.82 a barrel, their lowest close since Sept. 30.
- Delivered in December Brent CrudeFutures fell $1.59, or 1.7%, to settle at $90.03 a barrel, their lowest close since Oct. 3.
- Gasoline futures for November delivery fell 1.6% to settle at $2.5506 a gallon.
- Delivered in NovemberThermal Fuel FuturesPrices fell 2.2 percent to settle at $3.9935 a gallon.
- Natural gas futures for November delivery tumbled 4.2% to settle at $5.745 per million Btu, extending Monday’s 7% decline.
market driving force
“Bloomberg” reported that the Biden administration will release another 10 million barrels to 15 million barrels of oil in the SPR to curb further rises in gasoline prices, the latest round of a plan to release 180 million barrels of SPR in batches launched earlier this year .
Multiple White House officials said Biden might order additional releases as soon as Wednesday. The White House said Tuesday that President Biden will speak on gasoline prices on Wednesday.
The official release of SPR inventories comes following the U.S. had already cut SPR inventories to the lowest level since 1982, said Phil Flynn, senior market analyst at Price Futures Group.
The US government announced in late March that it will release 1 million barrels of oil per day from the SPR in the next 6 months, with a total of more than 180 million barrels. According to Flynn, 165 million of the 180 million barrels have been released.
The Flynn report noted that OPEC “might easily offset the re-release of the SPR if it saw fit, and they may have an incentive to do so as well, as a Biden administration does not have a substantial Diplomatic interaction.”
Much of the gains in oil prices in the first week of October on the OPEC+ decision to cut output have so far been erased. OPEC+ agreed to cut production by 2 million bpd from November, but the actual cut is expected to be around 1 million bpd as several producers are already under production quotas, but the move is still seen as significant, especially This is when the U.S. government calls for an increase in production, but the group still insists on reducing production.
Stephen Innes, managing partner at SPI Asset Management, said: “The conflict between the U.S. and OPEC+ continues to escalate in the near term, underscoring the political nature of some potential bearish oil catalysts. Given OPEC’s current output stance, the U.S. has a high incentive to move forward with Iran-Venezuela negotiations, especially ahead of the U.S. midterm elections.”
Strong gains in U.S. stocks and a weaker dollar failed to push oil prices higher, Warren Patterson, head of commodity strategy at ING, reported Monday.
“The market is instead cautious regarding the demand outlook. Chinese officials have made it clear that they will continue to pursue a zero-clearing policy, which will increase uncertainty regarding China’s oil demand in 2023. Recession fears elsewhere are also adding uncertainty,” he wrote. .
Meanwhile, the U.S. Energy Information Administration (EIA) on Wednesday will release last week’s U.S. oil inventories report. Analysts on average expected crude supplies to fall by 1.2 million barrels last week, gasoline fell by 2.2 million barrels and distillates fell by 2.5 million barrels, according to a survey by S&P Global Commodity Insights.
