Oil prices rebound as US backs off plan to exploit strategic oil reserves

The US Department of Energy is revisiting previous comments that it was considering releasing the strategic oil reserve and banning crude oil exports, Bloomberg’s Javier Blas reported on Twitter.

According to Blas, the DoE does not plan to operate the SPR “at this time”.

The news comes shortly after Goldman Sachs estimated that if the DoE released SPR oil it would likely be capped at just 60 million barrels, posing a downside risk of $ 3 for its Brent forecast of $ 90 at the end of the year.

A White House press briefing took on a similar tone without SPR.

The Biden administration will not make any predictions about releasing the SPR to ease high gasoline prices, press secretary Jen Psaki said in Wednesday’s daily briefing.

Psaki instead focused on the climate crisis, commenting that the issue was so urgent that she couldn’t wait any longer.

“I’m not going to make a prediction from here.”

The press secretary noted that the Administration took action in the aftermath of Hurricane Ida, including allowing SPR to trade with oil and refining companies.

“We have also taken action, including engaging with OPEC members,” Psaki said.

“But I’m not going to make any other predictions right now. We are constantly monitoring. We will seek to take additional measures if necessary, ”she added.

“Certainly we all want to keep gasoline prices low, but the threat of the crisis – the climate crisis – certainly cannot wait any longer,” Psaki said, commenting on whether other governments would become “weak” by go green. in the face of soaring energy prices, as world leaders prepare for the COP26 climate summit in the UK in November.

In recent months, the White House has been in contact with OPEC over the price of oil. National Security Advisor Jake Sullivan said in early August that OPEC + ‘s timetable for easing the cuts “is simply not enough” at a critical time in the global recovery.

At the end of September, Psaki said: “I assure you that we are not only engaged with OPEC, we are looking at all the means at our disposal to reduce gas prices.”

The OPEC + group has not responded to any calls from consumer countries and earlier this week implemented its plan to ease reductions from the 400,000 bpd minimum expected by the market.

Meanwhile, the average price of gasoline in the United States hit its highest level since October 2014, due to rising crude oil prices and higher demand. As of Oct. 7, the average U.S. gasoline price was $ 3,244 per gallon, according to AAA data.

Crude oil prices fell on Wednesday when Energy Secretary Granholm suggested the United States was considering a release of crude oil from the SPR and a ban on crude exports.

By Julianne Geiger for OilUSD

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