Oil set for weekly fall on stock releases

Oil prices were stable on Friday in choppy trading but remained on course for a second weekly fall after countries announced plans to release crude from their strategic stocks.

Brent crude futures were up $0.07, or 0.08%, at $100.67 a barrel by 1442 GMT. US West Texas Intermediate (WTI) crude futures rose $0.3 to $96.32.

Both contracts are set to fall for a second consecutive week, with Brent on course for a 3.6% slide and WTI for a 3% decline. The benchmarks have been at their most volatile since June 2020 for weeks.

Member nations of the International Energy Agency (IEA) will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180-million-barrel release announced in March. “There is some concern that by artificially lowering prices, you are only going to increase demand and that’s going to burn off that supply pretty quickly,” said Phil Flynn, an analyst at Price Futures Group.

The release could also deter producers, including OPEC and US shale producers, from accelerating output increases even with oil prices around $100 a barrel, ANZ Research analysts said in a note.

Published in The Express Tribune, April 9^th, 2022.

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