Enverus Intelligence Research in their latest FundamentalEdge report has confirmed that the Biden administration’s ongoing major drawdown of the U.S. Strategic Petroleum Reserve (SPR) has had little influence on the oil market.
Crude Price-Reduction Initiatives Futile
According to the report, despite initiatives to relax oil markets, oil prices remain tight nearly three months into the Ukraine conflict. Bill Farren-Price, the principal study author and head of Enverus Intelligence Research, warns that oil markets may become unstable again later this year. He said, “We see a tangible risk that oil markets will become volatile again later this year and into 2023 when the stock releases end. The release of oil from the Strategic Petroleum Reserve buys time for producers in the U.S. to push harder and for Iran nuclear diplomacy to bear fruit”.
Rising Crude Prices
Following a price increase in crude, President Joe Biden authorized a substantial fresh reduction of the U.S. SPR on March 10 after Brent Crude briefly topped $129 before settling at $127.98 per barrel. Crude prices have risen again as of May 31, with Brent Crude trading at $123 per barrel and West Texas Intermediate trading at over $119.
Source: Forbes
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