The oil prices down 1% this Thursday March 23 after the US Secretary of Energy Jennifer Granholmtell legislators that refilling the country’s Strategic Petroleum Reserve (SPR) would be difficult this year and it could take several years.
crude oil futures Brent fell 78 cents, or a 1.02%to $75.91 the barrel. While US crude futures West Texas Intermediate (WTI) gave up 94 cents, or a 1.33%to $69.96 the barrel.
Granholm’s comments likely spooked the market about a possible oversupply, especially since the Department of Energy plans to proceed with an additional release of 26 million barrels as part of his congressional mandate, said the UBS analyst Giovanni Staunovo.
Before the news was released, benchmark contracts were up almost 1%hoping that the fall in the dollar and the rise in gasoline prices would stimulate demand for the raw material.
The dollar index is trading at its lowest level since February 3, a day after the Federal Reserve hinted that a pause in its cycle of interest rate hikes was coming. A weaker greenback makes dollar-denominated oil more attractive to foreign currency holders, boosting demand.
Those responsible for monetary policy in the Federal Reserve believe that to combat inflation one more interest rate hike may be needed this yearbut less relaxation next year than most thought would be appropriate just three months ago.
The oil prices they also found true support since the RBOB gasoline futures hit a 10-day high on Thursday after the US Energy Information Administration said inventories of the product fell the most in the past week since September 2021.
Higher demand for gasoline will encourage refiners to use more crude to convert it into trucking fuel, Mizuho analyst Robert Yawger said.
Besides, Goldman Sachs noted on Thursday that the Demand from China, the world’s largest oil importer, continued to rise throughout the complex of raw materials, with a demand for oil that exceeded 16 million barrels per day.
The bank expects Brent to reach $97 per barrel in it second quarter of 2024.
Source: Ambito
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