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Oil falls most in 2 years after oil stockpile release

Commodities Apr 01, 2022 03:42PM ET
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© Reuters. FILE PHOTO: Workers walk as oil pumps are seen in the background in the Uzen oil and gas field in the Mangistau Region of Kazakhstan November 13, 2021. REUTERS/Pavel Mikheyev

By Laura Sanicola

(Reuters) -Oil settled lower on Friday as members of the International Energy Agency (IEA) agreed to join in the largest-ever U.S. oil reserves release.

Both Brent and U.S. crude benchmarks settled down around 13% in their biggest weekly falls in two years after U.S. President Joe Biden announced the release on Thursday.

Brent crude futures were down 32 cents, or 0.3%, at $104.39 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.01, or 1%, at $99.27.

Biden announced a release of 1 million barrels per day (bpd) of crude oil for six months from May, which at 180 million barrels is the largest release ever from the U.S. Strategic Petroleum Reserve (SPR).

Member countries of the International Energy Agency did not agree Friday on volumes or the commitments of each country at their emergency meeting, said Hidechika Koizumi, director of the international affairs division at Japan's Ministry of Economy, Trade and Industry. He added that additional details could be known "within next week or so."[nL9N2K200I]

OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies including Russia, on Thursday stuck with plans for an increase of 432,000 bpd to their May output target despite Western pressure to add more.

U.S. energy firms last week added oil and natural gas rigs for a second week in a row but growth in the rig count remains slow as drillers continue to return cash to shareholders from high crude prices rather than boost production.

"The looming flood of U.S. barrels does not change the fact that the market will struggle to find enough supply in the coming months," PVM analyst Stephen Brennock said.

"The U.S. release pales in comparison to expectations that 3 million bpd of Russian oil will be shut in as sanctions bite and buyers spurn purchases."

In a bearish signal for demand, China's commercial hub of Shanghai ground to a halt on Friday after the government locked down most of the city's 26 million residents, aiming to stop the spread of COVID-19.

JPMorgan (NYSE:JPM) said in a note it had kept its price forecasts unchanged at $114 a barrel for the second quarter and $101 a barrel in the second half of this year.

"Crucially, we recognize that a release of oil inventories is not a persistent source of supply, and if stranded Russian barrels average more than 1 million bpd next year, this will leave 2023 in a deep deficit, rendering our $98 a barrel price forecast for the year too low," the bank said.

Oil falls most in 2 years after oil stockpile release
 

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Comments (7)
William Hineser
William Hineser Apr 02, 2022 9:48AM ET
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Until the mindset changes at the top, things will be chaotic. I am not hopeful.
Marco cuevas
Marco cuevas Apr 01, 2022 3:49PM ET
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This and a windfall tax bigoil.is.done.....this is.for.the next.6.months.I woukdnt worry about today oil.traders. YOU ARE.DONE!
Dave Jones
Dave Jones Apr 01, 2022 10:59AM ET
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it's going straight back up
Shovan Ghosh
Shovan Ghosh Apr 01, 2022 9:05AM ET
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what s d news of gold???? last update 4 hrs what s going on???? useless admin
Jonas Kvistfors
Jonas Kvistfors Apr 01, 2022 5:27AM ET
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you can be sure that the bottom is in when these articles are posted.... haha
Saeed Ezati
Saeed Ezati Apr 01, 2022 3:24AM ET
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👍👍
William Smith
William Smith Mar 31, 2022 9:50PM ET
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The green movement coming back to haunt the free world.
 
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