(Bloomberg) -- Oil pared losses after the Biden administration announced it was canceling some 140 million barrels of previously mandated sales and would begin replenishing strategic reserves later this year.

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West Texas Intermediate edged back above $72 a barrel after shedding as much as 2.5% earlier in the session. Tuesday trading kicked off lower, halting an almost 7% surge in the prior two sessions, on news that China’s overall export growth slowed in April while imports plummeted.

“The price is right for the US to begin refilling their strategic oil reserve, providing a much needed bid for oil bulls as recessionary headwinds grow,” said Daniel Ghali, a commodity strategist at TD Securities

Traders have been watching closely for news on when the US would refill the reserves, which stand at a four-decade low. The administration had previously said it planned to restock the cache when oil prices fell to about $70.

Oil has retreated about 10% this year as worries over the Federal Reserve’s monetary tightening and the potential for a recession in the US outweigh a resilient physical market. Bank of America Corp. on Tuesday cut its forecast for Brent crude on a weaker outlook for global demand. Still, the United Arab Emirates, a key OPEC member, downplayed the need for deeper production cuts following curbs that started this month.

“Expectations for the SPR refill have been keeping buyers active on dips and it probably keeps a price floor in the low sixties,” said Carley Garner, a commodity broker at DeCarley Trading. “But ultimately, it is OPEC that has the majority of the power. OPEC has its mojo back and we suspect the combination of SPR refilling and OPEC efforts will eventually lead us toward $90.00 oil.”

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--With assistance from Natalia Kniazhevich.

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