The US Department of Energy is "making trouble" again: Delaying the replenishment of strategic oil reserves again

Due to the high price quoted,The Biden administration has decided to postpone replenishment of the Strategic Petroleum Reserve (SPR).The decision comes as oil prices have recovered above $80 a barrel

The US Department of Energy has chosen not to accept the potential offer it received because it considered the price too expensive, saying it withdrew its offer to buy 6 million barrels of oil as part of the strategic petroleum reserve because of current market conditions. It made a similar decision in January, when the offer was also rejected.

Earlier, in response to the impact of high oil prices, Biden ordered the release of a record 180 million barrels of SPR.

The Biden administration has been making "rhetorical" efforts to replenish the strategic oil reserves, but it has still been releasing SPR for the past 14 weeks, despite all its promises, in fact "doing nothing".

The Biden administration had said it would buy crude when prices fell to around $67- $72 a barrel. Now, with supply tight due to OPEC + cuts, WTI crude futures have "escaped" that range by climbing above $80 a barrel last week. Demand has largely been supported despite rising interest rates.

The U.S. Department of Energy has twice previously repurchased oil at a profit, and this is the fourth round of bidding.The OPEC + Joint Ministerial Monitoring Committee will hold an online meeting on Friday, which could allow Saudi Arabia to extend its voluntary production cut of 1 million barrels per day. Robert Yawger, executive director of U.S. energy futures at Mizuho Securities, said:

"Extending this production cut again could slow global efforts to contain inflation and could lead to difficulties in the oil market, especially as the summer driving season and early autumn season come to an end."

In the light summer trading, trading volumes in the oil market also remained subdued, while volatility was at its lowest level since January 2020.

In addition, the API report states that,Last week, crude oil inventories fell by 15.40 million barrels, and market expectations were 900,000 barrels。

If the official EIA data released tonight is the same, it would be the largest weekly decline in the data's history (since 1982). For the current oil market,Societe Generale InvestmentAccording to analyst and Oanda senior market analyst Edward Moya:

"Oil is still one of the most attractive deals and buyers are likely to emerge every time there is a decline."