Oil swings as Biden faces mounting pressure to rein in prices
Oil fluctuated in a choppy trading session as investors weighed the odds that the White House will intervene to cool rising energy prices and assessed declines in stockpile levels at the biggest crude storage hub in the U.S.
Futures in New York swung between gains and losses on Thursday, ultimately dipping lower midday. Biden is facing growing pressure, including from his own party, to address rising prices as gains in consumer costs hit the fastest pace in decades. His options include tapping the Strategic Petroleum Reserve or even banning oil exports.
"Where we are at this point is prices have risen because demand is rising and so you need a more permanent supply response," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
Meanwhile, inventories at Cushing, Oklahoma, the delivery point for benchmark U.S. crude futures, fell by about 36,000 barrels Nov. 5-9, according to traders citing data from Wood Mackenzie on Thursday.
This past year oil prices have soared as an economic recovery from the pandemic boosts demand. Rising prices prompted President Joe Biden to weigh the merits of an emergency crude release. As much as 60 million barrels could be released from the SPR, in part by bringing forward mandated sales from 2022, according to Citigroup Inc. That would be enough to wipe out the supply deficit that the Energy Information Administration has forecast for the rest of this year.
West Texas Intermediate for December delivery fell 62 cents to $80.70 a barrel at 12:22 p.m. in New York. Brent for January settlement dropped 39 cents to $82.06 a barrel.
With the market keenly watching for potential U.S. steps, trading has been highly volatile. One closely monitored market gauge -- the spread between the nearest two December contracts -- has swung by more than a dollar in four of the past six trading sessions, when it would generally move a few cents.
Meanwhile, production at Equinor's Johan Sverdrup oil field was halted completely due to a power supply issue onshore, Equinor spokesman Ola Morten Aanestad said in a message. He wasn't able to give an estimate of how long it will take to get back online.
