Oil prices temper off prospect of US crude inventory release

Rumors of the US mulling a release of 1 million bpd for several months has oil prices sliding.
Photo: Pavel MikHeyev/REUTERS / X03431
Photo: Pavel MikHeyev/REUTERS / X03431
BY MARKETWIRE, TRANSLATED BY DANIEL FRANK CHRISTENSEN

Oil trades lower Thursday by more than 5 dollar a barrel as rumors stir about the US considering a release of 1 million barrels per day across several months as means to accommodate the demand gap caused by Russia’s war against Ukraine.

European reference oil Brent sells for USD 108.30 a barrel Thursday morning against USD 114.53 Wednesday afternoon.

US benchmark crude West Texas Intermediate trades concurrently for USD 102.13 against USD 108.36.

US President Joe Biden’s administration is mulling the aforementioned stockpile release to mitigate rising gasoline prices and short supply in the wake of Russia’s aggression, say people with knowledge of the matter, reports Bloomberg News.

The total inventory release could entail up to 180 million barrels, sources say ahead of an expected official announcement.

This plan is accompanied by a diplomatic push by the International Energy Agency to coordinate a global stockpile discharge..

A final decision on such a release has yet to be made, but the White House might air a message on the matter as early as Thursday, sources tell the business media.

The White House has stated that Biden as of 7:30 p.m. CEST will comment on the US administration’s efforts to curb gasoline prices.

”The move is likely to be insignificant, with the key focus still being Russian exports,” Bloomberg writes, citing Victor Shum, vice president of consulting at S&P Global.

A wide range of options for Russian oil export are open, with up to 7.5 million bpd at stake.

If Russian crude export falls by 3 million bpd relative to the level pre-invasion, S&P Global says it would entail 825 million barrels, which is markedly more than the 575 barrels currently held in US inventories.

If Western sanctions against Russia intensify, the country will attempt to sell its oil to offtakers including India.

As of Thursday, rumors are circulating about Russia having offered New Delhi discounted flagship crude Urals, marked down by as much as USD 35 per barrel against the pre-war price to entice the south Asian nation to buy more oil, say people with knowledge of the matter, according to Bloomberg News.

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