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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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Oil Prices Rebound As U.S. Walks Back Plan To Tap Strategic Petroleum Reserve

  • The U.S. Department of Energy is walking back previous comments that it was considering a release of the Strategic Petroleum Reserve and a ban on crude oil exports
  • The DoE isn’t considering tapping the SPR “at this time”
  • Goldman Sachs: SPR release would have limited impact on crude prices

The U.S. Department of Energy is walking back previous comments that it was considering a release of the Strategic Petroleum Reserve and a ban on crude oil exports, Bloomberg’s Javier Blas reported on Twitter.

According to Blas, the DoE isn’t considering tapping the SPR “at this time”.

The news comes shortly after Goldman Sachs estimated that if the DoE released oil from the SPR, it would likely be limited to just 60 million barrels—posing a $3 downside risk to its year-end $90 barrel Brent forecast.

A White House press briefing took a similar no-SPR tone.

The Biden Administration will not make any predictions about releasing the SPR to alleviate high gasoline prices, Press Secretary Jen Psaki said at the daily briefing on Wednesday.

Psaki instead focused on the climate crisis, commenting on the fact that the matter was so urgent that it could not wait any longer.

“I’m not going to make any prediction of that from here.”

The press secretary noted that the Administration took steps in the aftermath of Hurricane Ida, including by authorizing exchanges from the SPR with oil and refining firms.

“We’ve also taken steps into — including engaging with members of OPEC,” Psaki said.

“But I’m not going to make any other predictions at this point in time. We’re continuously monitoring. We’ll look to take additional steps as needed,” she added.

“Certainly, we all want to keep gasoline prices low, but the threat of the crisis — the climate crisis — certainly can’t wait any longer,” Psaki said, commenting on whether other governments would get ‘weak-kneed’ about going green in the face of soaring energy prices, as the world leaders are preparing for the COP26 climate summit in the UK in November.

In recent months, the White House has been in contact with OPEC over the price of oil. National Security Advisor Jake Sullivan said in early August that the OPEC+ timeline for easing the cuts “is simply not enough” at a critical moment in the global recovery.   

At the end of September, Psaki said “I would assure you we’re not only engaged with OPEC, we’re looking at every means we have to lower gas prices.”

The OPEC+ group hasn’t heeded any calls from consuming nations and proceeded earlier this week with its plan to ease the cuts by the minimum 400,000 bpd the market expected.

Meanwhile, the average U.S. gasoline price rose to the highest level since October 2014, on the back of higher crude oil prices and higher demand. As of October 7, the average U.S. gasoline price stood at $3.244 a gallon, as per AAA data

Crude oil prices fell on Wednesday when Energy Secretary Granholm suggested that the U.S. was considering a release of crude oil from the SPR and a ban on crude exports.

By Julianne Geiger for Oilprice.com

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Leave a comment
  • David ODonnell on October 07 2021 said:
    They are already drawing from the SPR. Go look at EIA data for weekly stocks. Stocks ending 10/1 is the 4th week in a row they have drawn from the SPR.
  • George Doolittle on October 07 2021 said:
    Outside of for petrochemicals what is the demand for oil in Western Europe again?

    They have the most extensive and intensive public transportation network on Earth. I can understand natural gas prices soaring because of the aged French nuclear fleet and zero coal...plus stabbing the Netherlands in the back with their now former massive natural gas field...but the Netherlands won't be seeing soaring food prices imminently either unlike the rest of Western Europe to include Russia, Turkey, the entire Middle East etc etc.

    Long $gis General Mills
    Strong buy
  • Mamdouh Salameh on October 07 2021 said:
    Even a release of 100 million barrels from the United States strategic petroleum reserve (SPR) will only help narrow the deficit in the global oil market. This may reduce Brent crude price by an estimated $2 for a few days but the momentum of the surging oil prices will resume once the novelty of the release has been absorbed.

    Moreover, the minute the planned release is announced, the global oil market factors it in so as to mitigate its impact on both the market and prices.

    In the current environment of surging oil demand, any release is futile.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Ian Moodfish on October 08 2021 said:
    Mamdouh needs to educate Psaki on the feasibility of "going green".
  • John Duffy on October 09 2021 said:
    As typical, “Peppermint Patty” is not helpful. Why would we expect anything more from her?

Leave a comment

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