Ahmed Mukhtar Naqshbandi
ISLAMABAD/WASHINGTON: Oil prices fell on Tuesday after the United States said that it released more crude from its Strategic Petroleum Reserve (SPR) as mandated by lawmakers, defying expectations from a few traders that the release could be cancelled and delayed.
Brent crude futures fell by 70 cents, or 0.81 percent, to 85.91 dollars per barrel by 0256 GMT, while United States crude futures fell by 93 cents, or 1.16 percent, to 79.21 dollars per barrel.
US Oil Reserves
The United States Department of Energy (DOE) said that after the last session ended, it sold 26 million barrels of oil from the SPR, a release that is likely push the reserve to its lowest level since 1983.
The analyst at OANDA said that “energy traders were expecting to hear news about refilling the SPR and not tapping them for more supplies,” Edward Moya,
The DOE has considered cancelling the fiscal year 2023 sale after United States President Joe Biden’s administration sold a record 180 million barrels from the reserve the previous year. But that has required Congress to act to change the mandate.
Consumer Prices
Traders will look for clues from Tuesday’s crucial United States consumer price index (CPI) data for January. United States monthly consumer prices rose in the previous two months instead of falling as previously estimated, raising the risk of higher inflation readings in the months ahead.
The analyst at CMC Markets said that “any higher-than-expected data may cause the renewed sell-off in risk assets, including oil,” Tina Teng,
Supply concerns leased after the Energy Information Administration said it expected record March production from the seven most significant United States shale basins. Crude exports resumed at a main Turkish port after a devastating earthquake rocked the region.
“Oil is on the defensive, and it would get uglier if inflation proves harder to tame,” OANDA’s Moya said.
