The US government drew down 3.2 million barrels last week from the nation's Strategic Petroleum Reserve (SPR) as crude oil prices traded not far from seven-year highs, data from the Energy Information Administration showed
WASHINGTON (Pakistan Point News / Sputnik - 17th November, 2021) The US government drew down 3.2 million barrels last week from the nation's Strategic Petroleum Reserve (SPR) as crude oil prices traded not far from seven-year highs, data from the Energy Information Administration showed.
The Biden administration had been mulling use of the SPR for weeks now in a bid to cool pump prices of gasoline, which were also at their highest since 2014. The Weekly Petroleum Supply-Demand data released on Wednesday showed that inventory levels of the crude reserve were at 606.1 million barrels at the end of November 12, versus 609.4 million on November 5.
It is not known if the lower SPR stockpile levels cited for last week were a direct result of the policy being considered by the White House to bring the market lower. SPR releases are done at times to relieve short supplies from events such as hurricanes.
But the oil market did not miss making a connection between the SPR release and Biden's battle against oil and gas companies which he has accused of price gouging.
US oil benchmark West Texas Intermediate crude traded 1.4% lower at $78.66 a barrel by 10:55 PM ET (15:55 GMT), in an apparent response to the lower SPR stockpile.
The price drop occurred despite the Weekly Petroleum Supply-Demand data showing a drawdown of 2.10 million barrels for the week ended November 12, against industry forecasts for a drawdown of 1.2 million. Stockpiles of gasoline and distillate products also dropped for the week in review, resulting in what would typically have been a bullish market for oil.
The SPR drawdown was reported on the heels of a letter Biden sent out to the US Federal Trade Commission, where he urged immediate action against oil and gas firms for what he branded as "anti-consumer behavior".
"I'm writing to call your attention to mounting evidence of anti-consumer behavior by oil and gas companies," Biden wrote in his letter to Federal Trade Commissioner Lina Khan. "The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies' costs are declining."
He added that the FTC had the authority to investigate whether "illegal conduct" was costing American families more than what they should be paying at the pump. "I believe you should do so immediately."
Pump prices of gasoline in the United States are between $3.40 and $4.05, at least 80% higher from a year ago. The price spike came as global crude inventories remained in tight supply after the OPEC+ producing alliance repeatedly rebuffed calls from the United States and other consuming countries for more oil to match demand ramping up amid economic recovery from the coronavirus pandemic.
