Oil prices fell globally by more than 1%, at the end of today, Tuesday, February 14 (2023), after the US government announced its intention to release more of its strategic reserve stocks.
This announcement by the US government came to challenge the expectations of some traders, who excluded this launch from the strategic reserve, or at least the possibility of delaying it, according to what was published by Reuters.
And the US Department of Energy had said after the end of the previous session, during which oil prices rose, that it would sell 26 million barrels of oil from the strategic stockpile, according to the mandate of lawmakers, which is likely to push the US reserve to its lowest levels.
Oil prices worldwide today
At the end of the session, Brent crude futures – for April 2022 delivery – fell by 1.2%, to $85.58 a barrel.
West Texas Intermediate crude futures – for March delivery – fell 1.4%, to $79.06 a barrel.
Oil prices declined globally, at the end of yesterday’s trading, Monday, February 13 (2023), with fears of supply shortages and amid the decline of the US dollar, after it had declined in early trading.
Yesterday’s trading witnessed a focus of investors on short-term demand concerns, resulting from US inflation data, as well as maintenance of Asian and American refineries, according to what was seen by the specialized energy platform.
Oil price performance analysis
Wanda analyst Edward Moya said that oil traders were expecting to hear different news about refilling the US strategic stockpile, and not directing it to support global supplies, but the opposite happened.
Moya added: “Oil is on the defensive, and it may become more difficult if it proves difficult to tame inflation,” noting that the Ministry of Energy reconsidered canceling the sale from the reserve during the fiscal year 2023, after the Biden administration sold, during 2022, 180 million barrels.
In turn, CMC Markets analyst Tina Ting said that any higher-than-expected data could cause renewed selling of risky assets, including oil.
Indeed, US data showed an increase in the inflation rate in the United States by about 6.4% on an annual basis, during the past month, more than analysts’ expectations.
OPEC report
The OPEC monthly report showed that the production of the member states of the organization decreased by 49 thousand barrels per day during the past month, bringing the total to 28.876 million barrels per day, led by Saudi Arabia.
While OPEC raised its estimate of global oil demand growth to 2.32 million barrels per day this year, it cut estimates of oil supply from outside it to 1.44 million barrels per day.
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