Oil futures: Prices retreat as US defers SPR restocking, banking fears
Quantum Commodity Intelligence - Crude oil futures Friday were lower, having come under pressure late in the previous session after the US ruled out an immediate restocking of the Strategic Petroleum Reserve (SPR), while banking contagion fears also re-emerged.
Oil also tumbled as shares prices in Deutsche Bank dropped over 10% in Friday trade as credit default swaps in the banking sector spiked Thursday, amid fears over further contagion among European banks.
May ICE Brent futures were trading at $74.96/b (1730 GMT), compared to the day's range of $72.68-$76.32/b /b and Thursday's settle of $75.91/b, while the more-liquid Jun23 contract was trading at $74.58/b.
At the same time, May23 NYMEX WTI was trading at $69.22/b versus Thursday's settle of $69.96/b.
After releasing 180 million barrels of emergency reserves to tackle spiralling prices in 2022, the US had previously indicated it would start restocking at around $70/b, which had been viewed as a potential support level for WTI.
But US Energy Secretary Jennifer Granholm said Thursday the refill project may take several years, essentially ruling out any significant buying program in the coming months.
Oil benchmarks rebounded from low's later in the session on rumors the US could provide further support for regional banks, while Germany could provide further liquidity for Deutsche Bank.
Prices were up earlier as sentiment across the commodity complex had helped underpin the oil sector, while the initial weaker dollar also added some support.
The Dollar Index hovered around 102.50 points early Friday before spiking above 103 points, having started the week at close to 104.
Meanwhile, crude oil exports from Venezuela were reported to have all but dried up as the government attempts to get to grips with $21 billion worth of unpaid oil bills.
Russia's March crude oil output will come to 9.7 million bpd when planned production cuts are taken into consideration, a figure slightly higher than initially expected.
Deputy prime minister Alexander Novak was reported in local media as saying Thursday that a 500,000 bpd cut would be based on February's 10.2 million bpd output. That contrasts with previous market expectations that cuts would be based on February output at 9.7-9.8 million bpd.
