(New York) Oil prices fell sharply on Tuesday after several media announced a new drain on American strategic crude reserves, the Biden government’s response to the announced reduction in production by the OPEC + cartel.
Posted at 3:24 p.m.
The price of a barrel of Brent from the North Sea for delivery in December fell 1.73%, to close at 90.03 dollars.
The price of a barrel of American West Texas Intermediate (WTI), for delivery in November, fell 3.08% to 82.82 dollars.
Several US media have reported that US President Joe Biden will draw between 10 and 15 million additional barrels from the country’s strategic reserves (SPR).
Asked by AFP, the White House declined to comment and the Ministry of Energy did not respond.
White House spokeswoman Karine Jean-Pierre simply indicated that the head of state would make “an announcement tomorrow”, without further details.
This additional volume would represent the last installment of the program announced by Joe Biden in the spring and which provided for the use of 180 million barrels of oil drawn from reserves over a period of six months.
According to a Justice Department count released in mid-September, some 165 million barrels had been pumped or were to be pumped by November.
“It was a big catalyst today for prices,” commented John Kilduff of Again Capital, “because they had been talking more recently about buying back oil” to replenish strategic reserves, “which had helped support the costs “.
According to the Wall Street Journal, the US government had offered Saudi Arabia to acquire crude on the market if prices fell to $75 a barrel to replenish its strategic reserves.
The offer was aimed at convincing the kingdom, as well as the entire Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ agreement, not to cut production, to no avail.
In addition to the exceptional program announced in the spring by Joe Biden, a law passed by Congress already provided for the sale of 26 million barrels in the 2023 fiscal year, which runs from October 2022 to September 2023.
Since the beginning of September 2021, the United States has extracted more than 212 million barrels from SPRs, which are at their lowest since June 1984.
For John Kilduff, Joe Biden is looking to gain time until the legislative election on November 8, by avoiding a rise in crude oil, but above all in the price of gasoline, a strong marker for American motorists.
As for the day’s decline in oil prices, it is also explained by “the confinements in China and the postponement of the publication of Chinese GDP” for the third quarter, expected on Tuesday, “which reinforces concerns about the economy. and oil demand. This is enough to offset supply fears, including those related to OPEC,” explained John Kilduff.