- Oil heads for a weekly gain amid recession fears and U.S. reluctance to refill the SPR
- May ’23 WTI lost $1.68 this morning to trade around $68.28/Bbl
- Market weighs recession risk after Fed's 25 bp interest rate hike and an indication of at least one more increase this year
- Crude prices fell by nearly $3 earlier today possibly due to Deutsche Bank's liquidity and withdrawal problems, fueling concerns about the banking sector turmoil
- Lower equities along with a stronger U.S. dollar also added to the downward pressure on oil prices
- U.S. unlikely to refill the SPR in 2023 despite low prices (BBG)
- Refilling the SPR at prices in the administration’s stated range of $70/Bbl will be “difficult” this year, said Energy Secretary Jennifer Granholm to lawmakers Thursday
- She added that maintenance at two SPR sites and the ongoing 26 MMBbl crude sale mandated by congress make refilling the stockpile a challenge and it could take years
- The Administration announced in October of 2022 that it would repurchase crude for the reserve when prices were around $67-$72/Bbl
- The move would have served a dual purpose in that it would both refill the depleted reserves and increase demand when prices were low
- From 638 MMBbl at the start of 2021, the SPR now only holds 372 MMBbl of crude oil, its lowest level since 1983