Title: Oil slides before consumer nations' meeting on stocks release
Apr 01, 2022 03:00AM ET
Oil prices were down about $1 on Friday ahead of a gathering of consumer nations to debate a new release of emergency oil reserves in addition to a bigger planned drawdown by the United States.
U.S. WTI crude futures contracts were lower by $1.02 to $99.26 a barrel by 02:29 AM ET after trading as high as $101.75. On Thursday, the contract was down 7%.
Brent crude futures fell 79 cents to $103.92 a barrel on Friday, following a 5.6 percent drop on Thursday. The May contract finished at $107.91 on Thursday.
The reason for Thursday's slide was a scheduled U.S. release. On Friday, both benchmark contracts were on track for a weekly drop of 13 to 14%, the largest weekly drop in two years.
International Energy Agency (IEA) member states will meet at 8:00 AM ET on Friday to discuss another emergency oil release to follow up on the release of about 60 million barrels agreed on March 1.
On Thursday, US President Joe Biden announced the release of 1 million barrels a day for six months beginning in May. This would be the biggest ever release from the US Strategic Petroleum Reserve (SPR).
The aim is to offset interrupted oil supplies from Russia, which was sanctioned after the invasion of Ukraine, which Moscow calls a "special operation" to disarm its western neighbor.
But oil prices could change direction if the release is curtailed or delayed, or if supplies are lower than the White House says, consultancy Eurasia Group said in a note.
Traders are waiting to see how much oil the IEA countries will release, but don't expect a long-term impact on the market.