Oil down after US energy sec announcement on SPR ‎

Oil prices ended Thursday’s trading down 1 percent, reversing early gains after US Energy Secretary Jennifer Granholm told lawmakers that it could take several years to refill the US Strategic Petroleum Reserve (SPR).

According to Reuters, Brent crude futures fell 78 cents, or 1 percent, to settle at $75.91 a barrel. West Texas Intermediate crude futures fell 94 cents, or 1.3 percent, to end the session at $69.96 a barrel.

The two benchmark oil prices were estimated to have risen by about 1 percent before Granholm’s statements, supported by the decline in the dollar and the rise in gasoline prices.

It traded before the minister’s remarks at its lowest level since February 3, the day after the Federal Reserve hinted that it was close to stopping raising interest rates temporarily.

A weaker dollar makes oil denominated in the US currency more attractive to holders of foreign currencies, which raises demand for crude.

Policy makers at the US Central Bank believe that beating inflation may require raising interest rates once again this year.

Oil received more support from the trading of gasoline futures contracts at the highest level in ten days on Thursday, after the US Energy Information Administration said that its inventories fell by the most in the past week since September 2021.

Adding to the oil support, Goldman Sachs announced on Thursday that demand from China, the world’s largest oil importer, continues to rise, with oil demand exceeding 16 million barrels per day.

The bank expected that the price of Brent crude would reach $97 per barrel in the second quarter of 2024.