International oil prices closed sharply on Thursday as traders incorporated in their estimates the US government’s decision to release huge quantities of its strategic crude reserves, while the Organization of the Petroleum Exporting Countries (OPEC) and its allies unwavering in a slight increase in production and for May.
The global benchmark, Brent oil delivery in May, fell by $ 5.54 or 4.9%, to $ 107.91 a barrel, before the end of the contract with the meeting. For March, it gained 6.9%, while for the quarter it recorded a jump of 39%. The most active contract, that of Junefell $ 6.73 or 6% to $ 104.71 a barrel.
On the other side of the Atlantic, the American WTI crude delivery in May fell $ 7.54, or 7%, to $ 100.28 a barrel. This is its lowest closing since March 16. For March, the WTI rose 4.8%, while for the quarter it jumped by 33%.
According to US President Joe Biden, the country will release 1 million barrels of crude oil per day for six months from its reserves, a volume that corresponds to a total of 180 million barrels.
It is essentially a “temporary measure aimed at minimizing the spring price rally and, to that end, increasing supply while keeping prices stable,” said Marshall Steeves, an energy market analyst at S&P Global Commodity Insights. “However, the war in Ukraine remains a major source of concern and the loss of Russian oil from international markets continues to bear fruit.”
OPEC + will increase production in May by 432,000 barrels per day, as planned, as the cartel strongly resists pressure from the Biden government to move more radically to increase production.
The release of US stocks makes it easier for the United Arab Emirates and Saudi Arabia not to increase production immediately, Steeves said.
Russia is also offering crude in India at a huge discount due to lower demand due to Western sanctions, according to a report by Bloomberg.
On Wednesday, the US Energy Information Administration announced a drop of 3.4 million barrels in the country’s crude reserves.
Source: Capital
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