Oil Prices Rise on U.S. Plan to Refill Strategic Reserve
A surprise drop in U.S. crude stockpiles adds further upward pressure, lifting WTI and Brent futures in Tuesday trading.
Oil prices gained on Tuesday, lifted by a dual-catalyst of fresh government demand and signs of tightening commercial inventories. The U.S. Department of Energy announced its first significant step to begin refilling the nation's depleted Strategic Petroleum Reserve (SPR), while separate industry data pointed to a surprise drawdown in crude stockpiles.
West Texas Intermediate (WTI) crude futures, the U.S. benchmark, settled up 30 cents at $57.82 a barrel. Brent crude, the international benchmark, finished the session up 0.5% at $61.32 per barrel.
The primary driver for the bullish sentiment was an announcement from the Department of Energy detailing plans to purchase one million barrels of crude oil. According to the , the purchase is for future delivery in December 2025 and January 2026. This marks a pivotal shift in policy after historic drawdowns in recent years aimed at curbing high gasoline prices.
While the one-million-barrel purchase is modest relative to daily global consumption, traders interpreted the move as a significant signal. It suggests the administration sees current price levels as a favorable entry point to begin the long process of replenishing the reserve, potentially creating a soft floor for the market. The SPR currently holds just over 400 million barrels, substantially below its total capacity of more than 700 million barrels.
Adding to the upward momentum, the American Petroleum Institute (API) reported late Tuesday that U.S. crude inventories fell by 2.98 million barrels for the week ending October 17. The figure defied analyst expectations of a modest build and marked a sharp reversal from inventory increases seen in the prior two weeks. The official data from the Energy Information Administration (EIA) is scheduled for release Wednesday, which investors will watch closely for confirmation of the trend.
The move to refill the SPR is funded by a $171 million allocation from Congress, as detailed in the . Bids from producers for the current tender are due by October 28.
"This initiative is an important step in strengthening energy security and reversing previous energy policies," Secretary Wright noted in a statement. The department's action underscores a strategic priority to restore the reserve to its full operational capacity.
The combination of a new, albeit long-term, source of government demand and indications of robust near-term private-sector consumption provided a firm boost to the energy sector. The market will now look for details on the winning bids for the SPR tender and whether the official EIA report validates the bullish inventory data from the API.