Oil rose as traders waited for further signals from the White House on whether it will tap the Strategic Petroleum Reserve in response to high prices.West Texas Intermediate gained after advancing almost 4% over the past two sessions. Energy Secretary Jennifer Granholm said President Joe Biden may make an announcement to address the situation this week. As part of that process, Granholm said officials will scrutinize the Energy Information Administration’s Short-Term Energy Outlook due later on Tuesday.Oil soared to a seven-year high last month as a revival in consumption drained stockpiles, including in the U.S. Biden has been urging the Organization of Petroleum Exporting Countries and its allies to quicken the pace at which they are restoring supplies taken offline at the start of the pandemic. Their refusal to heed that call has put the focus back on Biden and the steps that he could now take to try and bring crude and gasoline prices back down.
Other nations including Japan have signaled their frustration at lofty prices in recent days. That raises the possibility the U.S. may act in concert with fellow consumers, including allies in the International Energy Agency. Washington could also seek to release oil in tandem with non-IEA states like China.
“Oil prices continued to inch up as the market gets bored of the worst kept secret that is the U.S. SPR release,” said Keshav Lohiya, founder of Oilytics. “
| Prices: |
- WTI for December delivery rose 0.8% to $82.59 a barrel at 9:53 a.m. in London.
- Brent for January settlement rose 60 cents to $84.03
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While championing the cautious stance taken by OPEC+ on supply, Saudi Arabia delivered the biggest increases to some of its official selling prices in decades at the end of last week. Despite the higher costs, Asian buyers will probably take their full contractual volumes next month, signaling a strong market.
Also due later on Tuesday are estimates from the industry-funded American Petroleum Institute for shifts in U.S. oil and product stockpiles, including at the key storage hub at Cushing, Oklahoma. Official data last week showed oil stockpiles at the delivery point for U.S. futures at a three-year low, but flows on a key pipeline toward the hub are rising.
| Related coverage: |
- Spare capacity in the oil market will shrink significantly next year as travel rebounds and amid a lack of investment among producers, according to Saudi Aramco.
- Truckers are striking against surging diesel prices across Asia’s emerging economies, threatening to add pressure on snarled global supply chains.
- The firm that runs a popular oil-tracking exchange traded fund will pay $2.5 million to settle claims that it made misleading statements when crude endured a historic rout last year.
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