Biden’s SPR strategy has capped oil prices, OilPrices said.

According to US Energy Secretary Jennifer Granholm, replenishing US strategic oil stocks will be “difficult” this year due to site maintenance as the SPR remains at 40-year lows, and it would take years to refill last year’s 180-million-barrel release. 

The statement from the U.S. Energy Secretary that it will be difficult to refill the SPR despite oil prices being in the desired range has added downward pressure to oil prices and limited the potential for a rebound. The lack of a US response to oil prices dropping into the $67-72 per barrel bandwidth after the White House had released a communiqué highlighting that range has puzzled the oil market. 

While the banking crisis in the U.S. appears to have eased, the fact that the U.S. was not refilling the SPR appeared to cap the initial rebound in oil prices. Since then, the dollar has rallied and European banking stocks have slid, sending oil prices tumbling on Friday morning. One bright spot for oil prices was the huge drop in gasoline inventories that might lead to higher US refinery runs and great crude demand.