Oil declines as the US defers replenishing its strategic reserve

24 Mar 2023 , 06:57 AM

As a result of concerns about a potential glut and after U.S. Energy Secretary Jennifer Granholm stated that it may take many years to restock the nation’s Strategic Petroleum Reserve (SPR), oil prices fell on Friday, extending losses from the previous day.

Brent crude prices had fallen 48 cents, or 0.6%, to $75.43 per barrel, while U.S. West Texas Intermediate crude futures had fallen 52 cents, or 0.7%, to $69.44.

After experiencing their worst weekly declines in months last week as a result of the banking sector crisis and concerns about a potential recession, both benchmarks were still on track for a weekly gain of between 3%–4%.

Granholm informed MPs on Thursday that it would be challenging to benefit from the low cost this year. President Joe Biden’s sales initiatives from the previous year reduced the stockpile to its lowest level since 1983.

In October, the White House said that it would repurchase oil for the SPR when the price was between $67 and $72 per barrel or less.

According to the RIA Novosti news agency, Deputy Prime Minister Alexander Novak stated that the previously announced reduction in Russia’s oil production of 500,000 barrels per day (bpd) would be from an output level of 10.2 million bpd in February.

According to Novak, that would suggest Russia plans to produce 9.7 million bpd between March and June when the production cut will be in effect—a far less output reduction than Moscow has previously stated.

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