09/28 Closing prices / revised 09/29/2023 08:42 GMT  |    09/28    OPEC Basket    97.48        +0.40 |    09/28   Mexico Basket (MME)        $88.12       -1.31  06/23  Venezuela Basket (Merey) $57.37  + 1.15 ( from previous month)  (Est. OPEC)  | 09/28    NYMEX WTI Texas Intermediate November  CLX23  $91.71     -1.97  | 09/28    ICE Brent November  BRNX23   $95.38     -1.17  | 09/2 8   NYMEX Gasoline October  RBV23    $2.505    -3 6%   09/28    NYMEX  Heating Oil  October HOV23   $3.318     +0.1%    |  09/28    Natural Gas November NGX23    $2.945     +1.6%  09/22    Active U.S. Rig Count (Oil & Gas)    630      -11 | 09/29    USD/MXN Mexican Peso   17.4471  Live data  | 09/29      EUR/USD  1.0610 Live data  | 09/29   US/Bs. (Bolivar)      $34.3009000  ( data BCV)    |

Oil traders hit ‘sell button’ Tuesday with U.S. set to release more crude from its Strategic Petroleum Reserve – MarketWatch

WTI oil futures fall back below $80 a barrel

Oil traders at work in Houston. Creative Commons photo by Oil Industry News.
Oil traders at work in Houston. Creative Commons photo by Oil Industry News.

Myra P. Saefong and William Watts, MarketWatch

EnergiesNet.com 02 14 2023

Oil futures marked their first loss in three sessions on Tuesday after the U.S. government said it would follow through with a plan to sell another 26 million barrels of crude from its Strategic Petroleum Reserve.

Price action

  • West Texas Intermediate crude for March delivery CL.1, -1.32% CL00, -1.29% CLH23, -1.30% fell $1.08, or nearly 1.4%, to settle at $79.06 a barrel on the New York Mercantile Exchange after back-to-back session gains.

  • April Brent crude BRN00, -1.17% BRNJ23, -1.17%, the global benchmark, declined by $1.03, or 1.2%, at $85.58 a barrel on ICE Futures Europe.

  • Back on Nymex, March gasoline fell 1.7% to $2.4885 a gallon.

  • March heating oil HOH23, -1.09% edged up 1.2% to $2.9401 a gallon.

  • March natural gas NGH23, -0.51% added 6.7% at $2.567 per million British thermal units after losing 4.3% on Monday.

Market drivers

The U.S. Energy Department announced on Monday afternoon a “notice of sale” to meet its obligation to Congress to sell 26 million barrels of crude oil from the SPR this year. It said the sale will “fulfill the congressional mandate set forth” as part of the Bipartisan Budget Act of 2015 and the Fixing America’s Surface Transportation Act.

The deliveries of the oil will take place from April 1 through June 30, it said.

The release plans were part of a congressional-mandate related to annual budgets that has been in place for almost a decade, Tyler Richey, co-editor of Sevens Report Research, told MarketWatch. But “when traders see an SPR release headline cross the wires, they think ‘more supply on the market’ and hit the sell button first and ask questions later.”

“When traders see an SPR release headline cross the wires, they think ‘more supply on the market’ and hit the sell button first and ask questions later.”— Tyler Richey, Sevens Report Research

The release comes after the U.S. last year drained 180 million barrels from the reserve as part of an effort to combat a jump in prices after Russia’s invasion of Ukraine last February.

“After the massive sales in 2022, there’s a lot less crude to sell from the SPR than in the past,” StoneX’s Kansas City energy team wrote in a Tuesday newsletter.

The coming release is separate from the 2022 sales, but there had been speculation that the 2023 sales would be canceled by the Biden administration given the low remaining level of reserves.

“This stance appears to have surprised the markets, as many had been expecting the 2023 release to be canceled and for the resupplying of reserves to start,” said Ricardo Evangelista, senior analyst at ActivTrades, in a note.

The SPR release news follows Russia’s announcement late last week that it will cut oil production by 500,000 barrels per day starting in March, in retaliation to price caps imposed by the West.

“Those cuts in the month of March will total roughly 15 million barrels, but the 26 million barrel release from the SPR by the U.S. beginning April 1st will more than offset those lost barrels, at least in the near term,” said Seven Report’s Richey.

Oil prices have also “started to key off of short-term interest rates in the wake of the CPI report as deep yield curve inversions across durations continue to blare economic warning signs about a looming recession,” he said. “A recession is never good for oil and refined products markets from a demand standpoint, and energy traders remain wary of a still elevated recession threat despite recent optimism in risk assets.”

Read: CPI shows U.S. inflation still sticky and slowing grudgingly in January

Meanwhile, in a monthly report, the Organization of the Petroleum Exporting Countries, or OPEC, on Tuesday nudged up its forecast for growth in world oil demand this year by 100,000 barrels a day, bringing it to 2.3 million barrels a day.

Oil traders also await the weekly U.S. petroleum supply report from the Energy Information Administration due Wednesday.

On average, analysts polled by S&P Global Commodity Insights forecast supply gains of 600,000 barrels for commercial crude and 1.6 million barrels for gasoline, while distillate stockpiles are expected to fall by 100,000 barrels for the week ended Feb. 10.

marketwatch.com 02 14 2023

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com

CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

Scroll to Top