Oil extended losses that began after Monday’s close on the announcement that the US was selling more crude from its strategic reserves, with a higher-than-expected inflation figure adding pressure.
The Strategic Petroleum Reserve will fall to its lowest level in more than 40 years as a result of the administration’s decision to move forward with a congressionally mandated sale of 26 million barrels of crude oil. West Texas Intermediate settled near $79 a barrel, falling on the day but recovering from a more than 3% drop earlier in the session after data showed consumer prices rose the most in three months.
Oil has had a mixed start to 2023 as traders try to price in the impact of China’s reopening, supply curbs announced by Moscow and lingering concerns of a US recession. Crude oil inventories continue to rise, providing another headwind for potential bulls. US inventories are expected to rise for a seventh straight week in the Energy Information Administration’s weekly report tomorrow.
Still, oil traders are returning in droves to the commodity after last year’s volatility-fueled exodus, with inflows rising to the highest seasonal levels in at least 15 years.
Prices:
- WTI for March delivery fell $1.08 to settle at $79.06 a barrel in New York.
- Brent for April settlement lost $1.03 to settle at $85.58 a barrel.
