Crude Surges as Trump Announces US to Fill SPR
Oil futures surged in aftermarket trading after Donald Trump said the US government will take advantage of low oil prices and buy "large quantities" of crude to fill the Strategic Petroleum Reserve.
"Based on the price of oil, I've also instructed the secretary of energy to purchase, at a very good price, large quantities of crude oil for storage in the US strategic reserve. We're going to fill it right up to the top," Trump said at a White House press conference, S&P Global reported.
Front-month Brent and WTI, which had settled slightly higher on the day, climbed around 7% above their Friday settles in aftermarket trading after Trump announced that his administration would take advantage of low oil prices to fill the SPR.
Crude futures shot to session highs following the announcement, with front-month Brent hitting $35.95 per barrel and prompt NYMEX WTI topping out at $33.86/b.
Implied volatility, a measure of downside risk in the market, for front-month NYMEX WTI fell to around 94% Friday, from 100% on Thursday, according to data provider Marketview.
Implied volatility reached 100% on Monday and Thursday, after having never reached this level since at least December 2007.
Oil futures had fallen more than 20% from last Friday after Saudi Arabia, OPEC's largest producer, started an unprecedented battle to squeeze Russia by slashing its crude selling prices over the weekend.
"We're buying at the right price and that's something that would have not even been possible a week ago," Trump said.
"The price of oil went down quite a bit, so we are going to fill it up."
source: Financial Tribune
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