Oil down as US due to announce massive oil release from emergency stocks

By Sibel Morrow

ANKARA (AA) - Oil prices declined on Thursday after reports that the US will release 180 million barrels of oil from its emergency stockpiles for several months amid supply uncertainties.

Investors are waiting for the major oil producers to make a decision over the possible increase of their monthly production.

International benchmark Brent crude was trading at $107.77 per barrel at 0658GMT for a 3.29% decrease after closing the previous session at $111.44 a barrel.

American benchmark West Texas Intermediate (WTI) was at $103.25 per barrel at the same time for a 4.23% loss after the previous session closed at $107.82 a barrel.

The price slumps were mainly driven by reports that the US administration will release 180 million barrels of oil from its Strategic Petroleum Reserves (SPR) to ease supply fears and suppress the prices.

The country is currently holding 568.3 million barrels of crude oil in its reserves, according to the latest data released by the Energy Information Administration (EIA).

The US is also the largest contributor to the International Energy Agency’s emergency stockpile plan, supplying 30 million barrels.

However, many experts say the move has been met with indifference, with the market questioning the country’s ability to do so as its previous attempts to sell oil from the emergency oil sales failed to ease the prices.

The US SPR release reports came a day before the meeting of the major oil producers of the OPEC+ group, of which Russia is a member.

The group will decide on their output for May. Except for slight output increases from baseline rises of the UAE, Iraq, Kuwait, Saudi Arabia and Russia starting from May, the group is expected to keep its 400,000 bpd production scheme unchanged.

Limiting further declines, the US inventories fell by 3.4 million barrels to 409.9 million barrels compared to the market expectation for a fall of 1.6 million barrels.

Meanwhile, the stalemate in the Russia-Ukraine peace talks continues to support the upward movements of the prices.

The head of the Russian delegation at the peace talks with Ukraine said on Wednesday that some progress was made at this week's meeting in Turkiye. Investors continue to monitor the developments in the region.