The Biden administration is apparently weighing a decision to purchase more oil to refill the U.S. Strategic Petroleum Reserve as prices get cheaper in the wake of fears over banking industry instability.
Futures for front-month WTI Crude sank to roughly three-month lows after news of SBV Financial Group’s collapse triggered significant market sell-offs that reportedly “leaked into the oil markets.”
Prices saw a massive run since Biden took office due to his administration’s green energy regulations and traded at 13-year highs when the Russia-Ukraine conflict kicked into high gear.
In June of 2022, Americans at the pump were paying an average of at least $5.00 per gallon for gas. According to data published by the American Automobile Association (AAA), the price of gas currently costs $3.46 per gallon, almost a dollar down from last year’s average of $4.31.
BIDEN COMMITTED TO REPLENISHING PETROLEUM RESERVE: HOCHSTEIN
— zerohedge (@zerohedge) March 16, 2023
In addition to concerns over SBV, Credit Suisse stock dropped about 30% this week in a development that has contributed to increasing fears over global economic stability. Oil futures are now at levels unseen since 2021, Investing.com reports.
From March to November of 2022, Biden released 180 million barrels of oil from the strategic reserve while prices were high, Valiant News previously reported. Notably, 45th President Donald Trump had made efforts to fill the reserve while the price of oil was much cheaper during his administration.
President Joe Biden delivers remarks on the soul of the nation, Thursday, September 1, 2022, at Independence Square in Philadelphia. (Official White House Photo by Adam Schultz)
“As OPEC+ cut supply and prices rose, the Biden administration tapped reserves to help Americans avoid paying high prices, and it’s looking like the timing was spot on. With prices in freefall, it’s possible that Biden will buy more oil to stockpile American reserves in an effort to mitigate future prices at the pump if something sparks a reversal in oil prices, and we trend back toward the extremely high prices we saw last year,” Benzinga reported.
CNBC’s Brian Sullivan reported that the Biden administration purchased another two million barrels for the reserve at the end of last year, but noted that prices would need to stay low for an extended period of time if the president wants to capitalize on the situation.
“OPEC won’t let oil sit in this price for long. Not with global banking contagion fears spreading,” he Sullivan said.
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