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Oil moves lower after U.S. signals no SPR replenishment

Yahoo Finance’s Ines Ferre joins the Live show to discuss the dip in oil prices after the U.S. signaled it will wait before refilling the Strategic Petroleum Reserve (SPR).

Video transcript

JARED BLIKRE: Energy markets dipping on worries about an oversupply, especially after the US signaled it will wait before refilling its Strategic Petroleum Reserve. The SPR weakness there contributing to the overall gloom in the markets. Here with more is Yahoo Finance's Ines Ferre. Ines.

INES FERRE: Yeah, Jared, and this lower oil prices, it's really having an impact on energy as a whole, energy stocks, equities as well. Let's take a look at our YFi Interactive board so we can see where the underlying commodity crude oil is right now. You're looking at WTI that is down more than 1 and 1/2%. You've got crude right now that is on pace for its biggest first quarter drop since 2020. That's when the pandemic hit, and you saw demand being wiped out. This week, we had a little bit of a rebound when it came to oil, but today, we are seeing losses, taking out a big chunk of the gains that we had seen this week.

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Also, Brent crude down 1.8%. Remember that last week, you had oil that, on a weekly basis last week, lost almost 10% of its value. A lot of this has to do with a stronger dollar, which is impacting the price of oil because oil is invoiced in dollars. You've got the US now that is holding off on refilling its Strategic Petroleum Reserve, as you just mentioned, Jared. Also, you have Russian oil that is still coming into the market, despite the Western sanctions. And then you've got concerns about a US recession, and the banking concerns, the banking worries deepening worries of a recession. You've got institutions that are selling their oil futures.

Now, we have been seeing Wall Street sort of pulling back a little bit on their forecast when it comes to crude oil for the end of the year, but not as much as you would think. I mean, one of the commentaries that I saw out there is that this isn't necessarily like 2008, where oil touched a low of $39 a barrel. Analysts aren't seeing oil going that much lower. But nonetheless, we are seeing a selloff when it comes to oil recently.

And then just taking a look at other commodities, look, if you are a gold bug, you are happy this week because gold touched $2,000 an ounce. I've spoken to analysts saying, this is it for gold, guys. The gold is coming out-- is breaking out from here. We'll see, but certainly, one analyst telling me, 2024, that's going to be huge for gold. Guys.