Reuters is reporting that the US will signal a willingness (plan?) to replienish the strategic petroleum reserve in the $67-72 range. The idea is that they want private companies to continue to drill and they believe that price is high enough to stimulate investment.

The front month contract is at $83 so that’s a ways off but the December 2023 contract is at $74 and Dec 2024 is at $69 so there’s a real benefit here for them.

The report also said that the US is prepared for more SPR releases this winter if needed and that product exports to combat rising prices is possible.

Perhaps most importantly, the report says that the 15 million barrels is part of the already announced 180 million barrel SPR release and that the delivery time has been extended to December. The idea that these would be new barrels helped to put downward pressure on oil prices earlier. The delivery of the news could end up being bullish but that depends on how credible you think the idea of more SPR releases is.

WTI crude oil rose earlier on private inventories but isn’t showing any immediate reaction to this, though it’s a very thin time of day.