RBC's Croft Says US Options to Bring Prices Down are Limited

RBC’s global head of commodity strategy Helema Croft highlights the lack of options the US administration has to battle high oil prices in a CNBC interview this week:

• “The US administration would clearly like a lot more Saudi barrels on the market, there are not a lot of options for this administration to get prices down, they’ve already done the big SPR release. The question is, are they really going to do more, we are not hearing any new blockbuster SPR releases.” Croft said.
• “It’s not really clear where the [US] administration goes next for additional barrels” she added, “Iranian barrels are already on the market”
• “They would like to get this Iraqi pipeline back online, that’s been down for months, there’s a question about potentially getting more Venezuelan barrels on the market but that sanctions relief is not likely to come until next year so the immediate picture does not look spectacular in terms of additional barrels.” Croft said.
• “I don’t think an SPR release is off the table, but a smaller one and a bigger problem for the administration is product shortages. Look at the diesel inventories, they are perilously low.” she said.
• “There are no signs that high prices are leading to demand destruction so are we looking at potential product tightness, especially in regions like the US East Coast.” Croft concluded.