Oil Climbs Ahead of Key Report Guiding U.S. Price Response

Oil soared to a seven-year high last month as a revival in consumption drained stockpiles, including in the U.S. Biden has been urging the Organization of Petroleum Exporting Countries and its allies to quicken the pace at which they are restoring supplies taken offline at the start of the pandemic. Their refusal to heed that call has put the focus back on Biden and the steps that he could now take to try and bring crude and gasoline prices back down.

Other nations including Japan have signaled their frustration at lofty prices in recent days. That raises the possibility the U.S. may act in concert with fellow consumers, including allies in the International Energy Agency. Washington could also seek to release oil in tandem with non-IEA states like China.

“Oil prices continued to inch up as the market gets bored of the worst kept secret that is the U.S. SPR release,” said Keshav Lohiya, founder of Oilytics. “

While championing the cautious stance taken by OPEC+ on supply, Saudi Arabia delivered the biggest increases to some of its official selling prices in decades at the end of last week. Despite the higher costs, Asian buyers will probably take their full contractual volumes next month, signaling a strong market.

Also due later on Tuesday are estimates from the industry-funded American Petroleum Institute for shifts in U.S. oil and product stockpiles, including at the key storage hub at Cushing, Oklahoma. Official data last week showed oil stockpiles at the delivery point for U.S. futures at a three-year low, but flows on a key pipeline toward the hub are rising.