Oil prices fell sharply early Thursday when the U.S. administration considered releasing 1 million barrels of crude oil a day 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 benchmark Brent crude futures last fell nearly 6 percent, or $ 5 a barrel, to trade at around $ 108 a barrel. But volatility is reflected in the trading price range between $ 107.8 and $ 112.94.
US West Texas Intermediate futures fell nearly $ 6 a barrel, or about 6 percent, to $ 101.99 a barrel after previously dropping to a low of $ 100.85.
Brent prices closed 3 percent higher on Wednesday, 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.