Oil prices fell on Thursday morning after a rail union reached a tentative agreement with its workers, averting a potentially disastrous rail strike in the United States.
WTI fell on Thursday to $84.97-a $3.5 (-3.97%) loss on the day. Brent crude fell to $90.53 at the time of writing, a drop of $3.57 (-3.79%) on the day.
Also weighing on prices are the dashed hopes that the United States would refill the SPR with sub-$80 oil. White White House sources suggested earlier that the SPR would be refilled when oil fell below $80 per barrel, the Department of Energy said it had no plans to refill the nation's Strategic Petroleum Reserves until after Fiscal 2023. The agency also said there was no $80 price trigger.
The news that the United States could soon purchase more than a hundred million barrels of crude oil to replenish crude that has been released over the last few months sent a strong bullish signal to the market that demand could soon increase, while U.S. production isn't expecting significant increases. The DOE's denial of such a plan has stripped away the promise of a quick demand spike.
Yet another price pressure is the strengthening U.S. dollar in the runup to what many expect will be a sizeable interest rate hike when policymakers meet next week. The general expectations are that the Fed will raise rates by 75 basis points.
Oil prices continue their volatile trade as the oil markets vacillate between worry about a global recession and a tight supply situation exacerbated by Russia's invasion of Ukraine and resulting sanctions on its energy products.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More