Melbourne — Oil prices dropped on Wednesday after US petrol stocks fell more than expected last week, which could heighten pressure on the Biden administration to release oil from emergency reserves to cap soaring petrol prices.
US West Texas Intermediate (WTI) crude futures fell 76c, or 0.9%, to $80.00 a barrel at 2.11am GMT, extending a 12c loss from Tuesday.
Brent crude futures fell 72c, or 0.9%, to $82.71, erasing a 38c gain from Tuesday.
US President Joe Biden has been considering releasing oil from the Strategic Petroleum Reserve (SPR) to cool petrol prices, which hit a record high at California pumps this week. Legislators, however, have mixed views on whether it is needed.
US House majority leader Steny Hoyer said late on Tuesday that he did not agree with Senate majority leader Chuck Schumer’s call on Sunday for tapping the SPR to lower petrol prices, saying the reserve was there to fill a crude oil supply gap in times of emergency.
Analysts say SPR oil would only offer temporary relief and what is needed is increased supply from US shale producers or oil cartel Opec.
“It seems the energy market is convinced that even if the US resorts to tapping the Strategic Petroleum Reserve, the benefits would be minimal … to the US consumer,” Oanda analyst Edward Moya said in a note.
Data from the American Petroleum Institute industry group showed petrol stocks fell by 2.8-million barrels for the week ended November 12, according to market sources.
The drawdown was much bigger than the 600,000 barrel decrease that 10 analysts polled by Reuters had expected.
Crude inventories rose by 655,000 barrels, the market sources said. That was less than analysts’ expectations for a build of 1.4-million barrels.