Oil fell with the US set to sell more crude from its strategic reserves and as inflation figures showed prices rose briskly into the new year.
(Bloomberg) — Oil fell with the US set to sell more crude from its strategic reserves and as inflation figures showed prices rose briskly into the new year.
Accelerating losses that began late yesterday after the market’s close, West Texas Intermediate fell as much as 3.3% before paring losses. Futures took a tumble following news that the administration would move forward with a 26 million barrel sale from the Strategic Petroleum Reserve that was congressionally mandated in 2015 for this fiscal year.
“The market has been spooked by the headlines around the SPR sales going forward,” said Stacey Morris, head of energy research at VettaFi Alerian. “It should have been known that this was coming,” said Morris, but given the administration’s attempts to halt the additional sales it may have clouded investor sentiment.
Oil has had a mixed start to 2023 as traders attempt to price impact of China’s re-opening, supply curbs announced by Moscow and persistent concerns that tighter US monetary policy may trigger a recession. Figures released Tuesday showed that US consumer prices remain elevated and may prompt the Federal Reserve to act more aggressively.
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