Oil pops after US signals SPR refill could begin in June

  • Oil pares losses after Energy Secretary Granholm says oil purchases for SPR could begin in June
  • Gold lower on stronger dollar
  • Crypto struggles as Wall Street prepares for market stress from debt ceiling drama


Oil were heavy after another round of Chinese data, this time money metrics, confirmed their economic reopening from COVID continues to disappoint.  Energy traders are somewhat shrugging off the latest OPEC monthly report that contained a slight upgrade with Chinese oil demand.  China is now expected to require 800,000 bpd, up from the 760,000-bpd seen last month.

Debt ceiling drama will eventually play a larger driver for oil prices, but right now whatever downside we are seeing with prices appears to be limited.  Oil looks like it is ready to consolidate here. A lot of the bad news has been priced in so fresh monthly lows seem unlikely.

Oil pared losses after Energy Secretary Granholm signaled oil purchases for the SPR could begin in June.  Everyone knew the US would have to begin purchases before the end of the year, but the June timeline seems a bit ahead of schedule.  With oil near the levels that the Biden administration was eyeing, it makes perfect sense for the US to fill up well in advance of winter.


Despite a selloff on Wall Street and tumbling bond yields, gold prices are falling.  It appears that the journey back to record highs will be a lot harder for bullion.

Today’s weakness for gold is a head scratcher.  Fed rate cut bets have increased, banking jitters returned for PacWest, and as another round of data confirms that the Fed is likely done hiking.

Gold’s weakness could be attributed to optimism that global recessionary fears are seeming less likely.  Today, the BOE delivered the largest upward revision to GDP in MPC history. The outlook has improved dramatically for Europe as the eurozone is no longer expected to have a deep recession.  There might be too much optimism now that the peak in rates is in sight and that might make life difficult for higher gold prices.  Gold bulls need to see a fresh catalyst that triggers market stress.


Bitcoin is lower as risk aversion runs wild on Wall Street.  The return of some banking jitters to PacWest was unable to trigger strong demand for cryptos this time. Banking contagion fears still remain low as some banks like Western Alliance show deposits are rising.

SEC Commissioner Hester Pierce supported the US taking notes over the crypto regulation set forth in Europe.  Pierce said, “I think we’re shooting ourselves in the foot by not having a regulatory regime in the US.”  Bitcoin will likely stay in a trading range as crypto traders remain in wait-and-see mode over what will happen on the regulatory front.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.