Oil prices pick up as US SPR is to be refilled

2024-05-02
Summary:

Oil prices rose Thursday as the US may buy for SPR. Prices had fallen on hopes for an Israel-Gaza ceasefire and high oil inventories.

Oil prices rose on Thursday on the prospect the US may start buying crude for SPR, after sinking to a seven-week low on hopes for an Israel-Gaza ceasefire, doubts and swelling oil inventories.

The Biden administration in 2022 sold 180 million barrels of oil in about six months from the reserve, the largest ever, in an attempt to lower gasoline prices after Russia invaded Ukraine.


The EIA said crude inventories rose by 7.3 million barrels in the week ended April 26, compared with analysts' expectations for a drop of 1.1 million barrels. Crude stocks were at the highest point since June.


US oil production rebounded sharply in February after extensive disruption the previous month caused by freezing wells and other outages though there had been essentially no growth in daily output since November.


Asia's imports of crude oil slipped slightly in April from March, as increased arrivals in China failed to offset lower purchases elsewhere in the world's top-importing region, the LSEG data showed.


Israeli Prime Minister Benjamin Netanyahu has vowed to go ahead with a long-promised assault on the southern Gaza city of Rafah while Blinken is pushing for a ceasefire agreement between Hamas and Israel.

XTIUSD

WTI crude has failed to hold 50 SMA, indicating the uptrend is weakening. We do not see big swings ahead of the PCE report and a dip to $78 or lower is more likely than not.


Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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