ForexLive Asia FX news roundup: Biden Considers Drawing 180 Million Barrels From the US Oil Reserve

　　On Thursday, March 31, US President Biden will talk about efforts to cut fuel prices. One policy option is to pull down the US oil reserves by 180 million barrels. That shocking news item broke within the Asian timezone.

　　Initially, it was reported that Biden was considering a 1 million barrel per day pull that would last for months. Given that the US consumes around 20 million barrels of oil per day, adding 1 million barrels to supply would make a marginal change in the price (lower). The 180 million barrel draw was noted while the news was being discussed. At one million dollars each day, this equates to six months of supplies from the Strategic Reserve. I made a post on some of the figures,

　　that the SPR presently stores around 560 million barrels, therefore a 180 million pull over six months is entirely possible

　　Also, keep in mind that the royalty on drilling on federal lands is 12.5 percent, which might be a source of filling for the SPR.

　　This was the main story of the day, and it resulted in a dramatic decline in oil prices.

　　Today is also the OPEC+ meeting (no change to current policy is expected).

　　The official (National Bureau of Statistics) PMIs from China for March were also noteworthy. Manufacturing and non-manufacturing both fell back below the 50 line, indicating contraction. The coronavirus outbreak in China in March was the greatest since the pandemic began in early 2020. The associated lockdowns, which are still in effect in several cities, impacted on economic activity, and this is reflected in the PMIs for the month.

　　While the oil markets were tumultuous, the currency markets were more calmer than they had been earlier this week.

　　USD/JPY reached a session high of just over 122.40 and is now back around (above) 122.00 as I write this. EUR/USD has risen somewhat. The cable is a little loose. The AUD and NZD have not changed much.

　　The USD/CAD has risen in tandem with the reduced oil price anticipated by CAD traders.