😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

Oil Down, Set for 3% Weekly Drop Over 210-Million-Barrel Emergency Release

Published 04/08/2022, 12:30 AM
Updated 04/08/2022, 12:33 AM
© Reuters.

By Gina Lee

Investing.com – Oil was down on Friday morning in Asia and was set for a weekly loss of 3% after consuming countries agreed to release a total of 240 million barrels of oil from emergency stocks.

Brent oil futures fell 0.64% to $99.94 by 12:30 AM ET (4:30 AM GMT) and WTI futures were down 0.47% to $95.58.

International Energy Agency executive director Faith Birol tweeted that the organization “is moving ahead with a collective oil stock release of 120 million barrels (including 60 million barrels contributed by the U.S. as part of its overall draw from its Strategic Petroleum Reserve).” More details of specific contributions will be released soon, the tweet added.

The release will amount to about 1 million barrels per day from May to the end of 2022. It could cap price rises in the short term, but would not fully cover volumes lost from Russia due to sanctions for its invasion of Ukraine on Feb. 24, according to some investors.

"Although this is the biggest release since the stockpile was created in 1980, it will fail to ultimately change the fundamentals in the oil market. It is likely to delay further increases in output from key producers," ANZ Research analysts said in a note.

The release could also deter producers, including the Organization of the Petroleum Exporting Countries and U.S. shale producers, from stepping up output increases even with oil prices around $100 a barrel, the note added.

Meanwhile, the European Union (EU)’s consideration of a ban on Russian oil, following its plan to embargo Russian coal, will cap any losses for the black liquid in the short term.

"In the court of public opinion, pressure is mounting on Brussels to act, and if that pressure valve pops and the EU sanctions Russian oil, we could see Brent crude at $120 in a heartbeat," Stephen Innes, managing director of SPI Asset Management, said in his own note.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.