The unprecedented decision by Biden to release 180 million barrels of oil from the country’s strategic petroleum reserve over the next six months has sent oil prices below $100. While plenty of upside risks remain, oil prices are on course to see their largest weekly decline in two years.
As you can see by the chart below US stocks of crude oil have been plunging.
From 540 million Barrels innventory June 2020 to under 400 million today. So as you can creepie Uncle Joes crude oil release ony get us back to where we were. BUT buy the fact its only 1 million barrles a day at best the gap will widen. Thats becuase the US economy is opening back up. At the present time oil supplied is 3 million barrles a day less then consumption that is set to increase as travel season approaches. That is why US inventories are below the 5 years below the 5 years average.
The decision by Biden to release 180 million barrels of oil from the SPR demonstrates just how desperate the situation in oil markets has become
In a week that saw OPEC+ implementing its latest production increases and the United States announcing an unprecedented SPR release, oil prices saw their largest weekly decline in more than 2 years. Whilst the OPEC+ decision was far from a surprise, the readiness of the Biden administration to tame runaway fuel prices pushed Brent futures closer to the $100 per barrel mark. Despite the scope and ambition of Biden’s latest move, it might not be enough to keep WTI below $100 per barrel as the sheer size of Russia’s potentially sanctionable 3 million b/d seaborne flow still looms over markets.