Oil prices fell sharply below $ 107 a barrel on Thursday as the U.S. administration considered releasing crude oil for several months from their Strategic Petroleum Reserves (EC).
Rising crude oil prices were weighed down after supply concerns pushed oil prices higher on Wednesday, tracking a fall in American oil reserves putting a refocus on supply disruptions.
The last benchmark Brent crude futures fell more than 6 percent, or nearly $ 7 a barrel, to trade at $ 106.8 a barrel. But volatility is reflected in the trading price range between $ 106.5 and $ 112.94.
US West Texas Intermediate futures fell over $ 6 a barrel to last trade at $ 101.37 a barrel after previously slipping to a low of $ 100.85.
But a Reuters survey of 40 economists and analysts showed oil prices will continue to remain above $ 100 this year as dry markets struggle to break away from Russian oil.
Brent crude is forecast to average $ 103.07 a barrel this year, up from the previous survey consensus of $ 91.15 and the 2022 highest estimate in a Reuters poll.
On Wednesday, Brent prices settled 3 percent higher driven by supply concerns as peace talks to end the war between Russia and Ukraine stalled and on doubts the oil -producing country, scheduled to meet today, would be able to increase supply.
US President Biden is expected to announce plans to release oil from their massive emergency reserves aimed at lowering gasoline prices that have risen to a record following Russia’s invasion of Ukraine.
The move marks the third time the US has used its strategic reserves in the past six months and will be the most significant release in the EC’s nearly 50 -year history.
So far, US output has not managed to bring down prices as world demand is nearing pre-pandemic levels while supply is getting tighter globally.
Oil prices have soared since Russia invaded Ukraine in late February, and the U.S. and allies have responded with heavy sanctions on Russia, the world’s second -largest exporter of crude oil.
Brent crude jumped to nearly $ 140 a barrel earlier this month, the highest since the financial crisis in 2008, and remained above $ 110 a barrel since Russia invaded Ukraine on Feb. 24.