Oil prices decline in anticipation of data on stocks in U. S.
2023.02.14 01:29
Oil prices decline in anticipation of data on stocks in U. S.
By Kristina Sobol
Budrigannews.com – Oil prices fell on Tuesday after the United States government defied expectations that the release might be canceled or delayed by releasing more crude from its Strategic Petroleum Reserve (SPR) as required by lawmakers.
By 0256 GMT, futures were down 70 cents, or 0.81 percent, to $85.91 per barrel, and futures were down 93 cents, or 1.16 percent, to $79.21 per barrel.
After the previous session ended, the U.S. Department of Energy (DOE) announced that it would sell 26 million barrels of oil from the SPR. This would likely bring the reserve down to its lowest level since 1983.
According to Edward Moya, an analyst at OANDA, “Energy traders were expecting to hear news about refilling the SPR and not tapping them for more supplies.”
After the administration of U.S. President Joe Biden sold a record 180 million barrels from the reserve last year, the DOE had considered canceling the sale for fiscal year 2023. However, Congress would have had to act to alter the mandate as a result of that.
Tuesday’s crucial U.S. consumer price index (CPI) data for January will provide traders with clues. The likelihood of higher inflation readings in the months to come is increased by the fact that U.S. monthly consumer prices increased rather than falling as anticipated in the previous two months.
Tina Teng, an analyst at CMC Markets, stated, “Any higher-than-expected data may cause a renewed sell-off in risk assets, including oil.”
After the Energy Information Administration stated that it anticipated record March production from the seven largest U.S. shale basins, supply concerns also eased. After a devastating earthquake in the area, crude exports resumed at a crucial Turkish port.
According to Moya of OANDA, “Oil is on the defensive and it could get uglier if inflation proves to be harder to tame.”
