The November contract for WTI crude fell to $83.22 per barrel on Tuesday afternoon—sliding 2.64% from Monday. The last time WTI was this low was days before OPEC+ met, when the group decided to cut 2 million barrels per day from its production targets starting in November.
The price dip is in part attributed to talks about releasing more barrels from the U.S. Strategic Petroleum Reserves. Initial reports suggested that the Biden Administration could release another 10 million barrels and 15 million barrels from the nation’s SPR. Later reports, however, clarified that the figure discussed was part of the 180 million barrels set to be released between March and October—previously disclosed by the Biden Administration. The oil could be sold this week, and would be the final tranche of the 180 million barrels.
But oil markets are still skittish that the United States could release even more oil from the SPR to counteract high gasoline prices ahead of midterm elections. The United States is congressionally mandated to sell another 26 million barrels of crude from the SPR in the fiscal year 2023, which began on October 1, sparking worry that the US could move to release this in short order, rather than spread out throughout the year.
The U.S. SPR has fallen to 405 million barrels so far this year, from 593 million barrels in inventory at the start of the year, according to official EIA data. It is the lowest amount of crude oil in the SPR inventory since June, 1984.
Aside from the SPR release, another factor weighing on oil prices is the persistent fear of recession, which could sap oil demand.