WTI Crude Oil Extends Gains as US Considers Tapping Into SPRs
Aiswarya Gopan • 2 min read
WTI crude oil is starting the new week on a strongly bullish note, extending its gains from the previous session and week as OPEC+ failed to react to US President Joe Biden’s calls for ramping up production amid strong rebound in oil demand worldwide. At the time of writing, WTI crude oil is trading at around $82.18 per barrel.
Over the previous session, WTI oil gained over 3% of its value over the possibility of the US releasing crude from its strategic reserves to offset the surge in prices. According to Eenrgy Secretary Jennifer Granholm, crude inventories data releasing this week will be a key consideration for the decision which could potentially bring down oil prices in the US.
Biden led a plea on behalf of leading oil consumers around the world last week when he asked OPEC and its allies to increase the pace of production after crude oil touched multi-year highs. Earlier this year, OPEC+ had announced a plan to gradually raise output by 400k bpd even as oil demand rebounds strongly after countries emerge from lockdowns and resume normal levels of economic activity.
The US is considering an SPR release following the release of EIA’s monthly survey this week, which could shed light on short-term energy outlook across the nation. This development could drive some volatility in oil markets this week and possibly bring down prices, offering some relief to major energy consuming countries around the world, leading with the US.
In response to Biden’s calls, leading oil producing nation and the de facto leader of the OPEC group, Saudi Arabia instead chose to raise its official crude prices for all buyers. According to experts in the industry, this move could be taken as a sign that the group will not give in to the US’s demands and stay on track with its original plans to withdraw the severe production curbs gradually.