U.S. West Texas Intermediate crude oil prices fell by 1% on Thursday after U.S. Energy Secretary Jennifer Granholm informed lawmakers that refilling the Strategic Petroleum Reserve (SPR) might take several years. Nonetheless, the market is still higher for the week and in a position to post a potentially bullish closing price reversal bottom.
Granholm's remarks raised concerns about a potential oversupply of oil, which was amplified by the Energy Department's plan to release an additional 26 million barrels as part of its congressional mandate.
Prior to Granholm's comments, oil prices had risen by approximately 1%, supported by higher gasoline prices and a weaker dollar.
Crude Oil Prices Strengthened by Weaker Dollar, Higher Gasoline Prices, and Surging Demand from China
Crude oil is currently being supported by several factors. Firstly, the U.S. Dollar is weaker, which is making oil priced in dollars more attractive to holders of foreign currencies. This is due to the Federal Reserve hinting at pausing interest rate hikes, causing the dollar index to trade at its lowest since February 3rd.
Secondly, RBOB gasoline futures hit a 10-day high after the U.S. Energy Information Administration said stockpiles of the product fell last week by the most since September 2021. Higher gasoline demand will encourage refiners to use more crude oil to make fuel.
Thirdly, there is surging demand for oil from China, which is the world’s biggest oil…