Global oil prices edged lower Tuesday amid reports that President Joe Biden is planning to unveil another release of crude from the nation’s emergency reserves in an effort to reduce energy costs heading into the mid-term elections.
Reuters has reported that the Biden administration could outline plans for the sale over the coming days, with sources suggesting as many as 40 million barrels could find its way onto the market – around 14 million of which were already announced when the President tapped the Strategic Petroleum Reserve in early spring.
WTI crude futures, which are tightly-linked to US gasoline, have risen more than 8% since late September, boosted in part by an announcement from OPEC cartel members to cut their collective production rates by around 2 million barrels per day, a move US officials have said was driven by Saudi Arabia’s need to soften the impact of sanctions on the sale of Russian crude.
Saudi Arabia’s foreign minister, however, said the US has asked it to postpone the decision by a month, a move that would push the output cuts past next month’s mid-term election date on November 8, and stressed that its decisions are made through ” non-politicized constructive dialogue” aimed at “protecting the global economy from oil market volatility.”
US gas prices, meanwhile, have risen more than 5.22% over the past month, to a national average of around $3.87 per gallon, as a result of the jump in broader crude prices. Gas is also up more than 16.3% from last year’s levels.
WTI crude futures for November delivery were marked 43 cents lower in early Tuesday trading to change hands at $85.03 each. Brent crude contracts for December delivery, the global pricing benchmark, fell 46 cents to $91.14 per barrel.
President authorized the release of 180 million barrels from the SPR on March 31, spread over six months, in order to bring down global crude prices and ease the supply hit from Russia’s war on Ukraine.
The move marks the third release from the SPR in six months, and the largest-ever from the nation’s emergency stockpile, which now sits at the lowest levels since June of 1984, according to Energy Department data published Wednesday.
US crude prices actually rose 18.6% from the time Biden first tapped the SPR in late November to the extended spike triggered by Russia’s invasion of Ukraine on February 24.
Prior to that, global oil prices rose 12% in the two weeks following President Barack Obama’s decision to release 30 million barrels from the SPR in June of 2011 to offset supply disruptions linked to the civil war in Libya.