Oil prices dive as US moves to release reserves
Oil prices tumbled on Thursday with the United States set to announce the largest ever release from its Strategic Petroleum Reserve, while OPEC+ stuck to its existing deal for May output.
Brent crude futures for May, which expire on Thursday, were down $5.28, or 4.65%, at $108.17 a barrel by 12:31 AM ET. The more actively traded June futures were down 3.2% at $107.86, after falling by $7.
US West Texas Intermediate futures for May delivery were down $3.88, or 3.6%, at $103.92 a barrel, off a low of $103.90.
Front-month futures for US crude and Brent were on track for their highest quarterly percentage gains since the second quarter of 2020.
US President Joe Biden on Thursday will announce the release of a record 1 million barrels of oil a day for the next six months from the US Strategic Petroleum Reserve, the largest release ever, to try to bring down gasoline prices, the White House said.
Read: OPEC meets with US shale executives
“This is a market where every barrel counts and (the potential SPR release) is a significant volume of oil to be put on the market for an extended period of time,” said John Kilduff, a partner at Again Capital LLC.
Any SPR release could also be a sign that Washington does not expect a quick resolution to the crisis in Ukraine, which has squeezed oil supplies, said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“Desperate times clearly call for desperate measures and clearly the Biden administration believes the spike in oil prices warrants this move to eat into the country’s emergency supplies.”
Published in The Express Tribune, April 1st, 2022.
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