Oil Slumps as US Opens Strategic Reserves
Oil prices fell early on Tuesday even as the Organisation of Petroleum Exporting Countries (OPEC) raised its 2023 demand forecast. The retreated global price of crude was driven majorly by the United States’ plans to release more oil from its Strategic Petroleum Reserve (SPR).
West Texas Intermediate crude for March delivery was last seen down US$1.32 to US$78.82 per barrel, while April Brent crude, the global benchmark, was down US$1.18 to US$85.43.
US inflation rose at a 6.4% annualized pace in January, down from 6.5% a month earlier but a larger increase than the consensus estimate for a 6.2% rise.
The report is the latest to show the economy is still running hot in the United States, following a big rise in employment, which could push the Federal Reserve to turn more hawkish with its interest-rate policies, raising the risk of a demand-destroying recession.
Along with recession concerns, the US Department of Energy said it will release a further 26 million barrels from the Strategic Oil Reserve.
In its influential Monthly Oil Market Report, OPEC raised its 2023 demand-growth forecast by 0.1 million barrels per day to 2.3 million bpd. It also cut its forecast for non-OECD oil supply growth to 1.4 million bpd, down 0.1 million bpd.
“Looking ahead, global oil demand is forecast to rise by 2.3 mb/d in 2023, y-o-y. The OECD region’s demand is projected to rise by around 0.4 mb/d in 2023, still just below pre-pandemic levels in absolute volumes,” the cartel noted. #Oil Slumps as US Opens Strategic Reserves
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