This morning prices fell again, following the same trend of the previous session. These sharp decreases in prices come after the United States government said they would consider the idea of selling oil from their strategic reserves. Today crude oil opened at $77.00, diesel at $2.4377, and gasoline at $2.3048.
The Strategic Petroleum Reserve, or SPR abbreviated, is the world’s largest emergency crude oil supply that has played essential roles in reducing the disruption impacts of petroleum products in the past. The US government now believes that tapping into these reserves will help curb the aggressive oil price increases. While United States Presidents have released large quantities of oil from the reserves before, none has been more significant than 2011. That year former President Obama ordered over 30 million barrels be sold to the effects of the crude oil disruption from Libya. Now, President Biden must decide what he wants to do after consumers learned that oil had hit new 7-year highs this week, and it does not seem to be slowing down anytime soon.
According to Goldman Sachs, the most likely release of crude oil from the SPR would be around 60 million barrels, double President Obama’s release in 2011. Also weighing on prices has been US crude inventories, which fell significantly more than expected last week. While OPEC+ agreed to stick to their original plan of raising output into the market by 400,000 bpd in November, there needs to be more oil. The United States has an important decision coming up which will certainly have a significant impact on oil prices for the foreseeable future.