Oil prices fell on Friday after European banking stocks plummeted and ABD said refilling the country’s Strategic Petroleum Reserve (SPR) may take several years, dampening demand prospects.
Brent crude was down 92 cents, or 1.2%, to $74.99. West Texas Intermediate (WTI) crude futures fell 70 cents, or 1%, to $69.26 a barrel.
Both benchmarks rose this week as turmoil in the banking sector eased. Brent futures were up 2.8% on the week, while WTI crude futures were up 3.8%. Last week, both benchmarks recorded their biggest declines in recent months.
The dollar rose 0.6% against other currencies, which suppressed oil, making crude oil more expensive for holders of other currencies.
The White House had said in October it would buy back oil for SPR when prices dropped to about $67-72 per barrel or below, but now US Secretary of Energy Jennifer Granholm says that it will take several years to refill the country’s Strategic Petroleum Reserve and it will be difficult to capitalize on this year’s low prices.
Oil was supported by expectations of strong demand from China. In the world’s largest oil importer, demand for commodities in China has increased and oil demand has exceeded 16 million barrels per day.
Russian Deputy Prime Minister Alexander Novak said the previously announced cut of 500,000 barrels per day in Russia’s oil production will come from 10.2 million barrels per day in February.
According to Novak, this means that Russia aims to produce 9.7 million barrels per day between March and June.
