- The US Strategic Petroleum Reserve is at its lowest level since 1983.
- Global crude inventories have been heavily depleted amid disruptions from the Iran war.
- Oil prices were climbing again on Monday after dropping last week on hopes for US-Iran talks.
America's stockpile of crude oil has dropped to the lowest level in more than four decades.
According to the US Department of Energy, the US Strategic Petroleum Reserve declined by 6 million barrels last week to 298.7 million. Data from the Energy Information Administration shows that's the first time the stockpile has dipped below 300 million barrels since 1983.
The US began the year with around 415 million barrels in the reserve, but that's come down as the Trump administration has released more crude into the market to offset disruptions from the Iran war.
Markets have been hopeful that the Strait of Hormuz could soon reopen after comments from Trump and other officials last week suggested a deal was close. However, over the weekend, Trump said that the US was content to let the economic toll of the war bring Iran back to the negotiating table.
As a result, oil jumped again on Monday as traders began to doubt the Strait will open in the near term. Brent was up 5% to trade at $87.82, while US oil rose 5% to $82.28.
"Markets are facing a delicate mix of geopolitical and monetary policy risks. Uncertainty around the Strait of Hormuz keeps an upside risk in oil prices and inflation, while Wednesday's US CPI could reshape expectations for the Fed's September decision," Lukman Otunga, head of market research at FXTM, said.
The July CPI number will be closely watched as a gauge of pressures stemming from the war. June saw a cooler-than-expected inflation figure as energy prices dwindled amid hopes for a peace deal, but costs were up again in July as tensions re-escalated. The average price per gallon of gas in the US has climbed back above $4, up from $3.88 a month ago, according to AAA.
Researchers and energy commentators have warned that waning global oil inventories could spur a new chapter in the energy crisis. Independent market research firm HFI Research predicted earlier this summer that countries could start hoarding crude, leading to "real panic" in the market.
So far, though, oil has yet to reclaim its wartime highs around $120 a barrel, despite the ongoing disruption to global flows.
The post America's oil reserves are the lowest in 43 years appeared first on Business Insider
