(Bloomberg) -- Oil rose as traders weighed the odds of a release of crude from the U.S. Strategic Petroleum Reserve after OPEC+ resisted a plea from President Joe Biden to boost supplies more quickly.
West Texas Intermediate gained 0.5% in early Asian trading after surging 3.1% on Friday to pare a weekly loss. The administration will consider data coming out Tuesday as it assesses measures to stem gasoline prices, Energy Secretary Jennifer Granholm said on Sunday. Vitol Group, the biggest independent oil trader, told Bloomberg on Sunday that OPEC+ is unlikely to change its stance.
Oil’s rally to a seven-year high has alarmed Biden, who led calls from consumers last week for the Organization of Petroleum Exporting Countries and its allies to step up the pace they are reactivating the supply shuttered at the start of the pandemic. Despite his plea, the alliance chose to stick with a planned, modest hike of 400,000 barrels a day. That’s raised the possibility of an SPR release, which could be made in coordination with other states.
As the U.S. government weighs its options, Granholm highlighted the monthly survey by the Energy Information Administration that’s due to be released this week. Its short-term energy outlook provides forecasts on demand, supply, trade and other information on oil and energy other markets.
A day after OPEC+ ignored Biden’s call to speed up the pace of output increases after last year’s Covid-related cuts, Saudi Arabia raised its official crude prices for all buyers. That move is a signal that the country will continue to resist U.S. pressure to pump faster, said Mike Muller, the head of Asia for Vitol.
Crude has soared this year -- fanning inflation and lifting product prices -- as the roll-out of vaccines boosted mobility and stoked energy demand. Additional consumption has been driven by a crunch in gas supplies. Goldman Sachs Group Inc (NYSE:GS). has forecast that global benchmark Brent will hit $90 a barrel.
The oil market remains backwardated, a bullish pattern marked by near-term prices trading above those further out. Brent’s prompt spread was $1.05 a barrel on Monday compared with 70 cents a month ago.
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