Oil prices fell sharply on Thursday after reports that the US was considering releasing up to 180 million barrels from its Strategic Petroleum Reserve, the highest release in the SPR’s almost 50-year existence.
May Brent crude futures are down 4.3 percent per barrel. The May contract expires on Thursday, and the most frequently traded futures were down $5.08 after losing more than $6 earlier.
President Joe Biden of the United States will talk later on Thursday about his administration’s efforts to cut fuel prices, which have reached record highs since Russia’s invasion of Ukraine.
For the following six months, a drip discharge of 1 million barrels of oil is planned.
It’s an indication that the Ukraine conflict, which has strained oil supplies, is unlikely to be resolved quickly.
However, this would only be a discharge of oil stockpiles, not a reliable source of supply in the coming years. As a result, such a discharge would not address the underlying supply gap.
Moscow’s crude oil and oil product exports have been affected as a result of Western financial sanctions implemented in response to its invasion of Ukraine.
On Thursday, OPEC+, which includes Russia, will meet and is anticipated to maintain its May output target. Major Due to overstocking following a steep decline in European purchases, Russian oil refiners have warned the Energy Ministry that they intend to cut refinery operations even more in the coming weeks.
On top of planned maintenance shutdowns, further refinery cuts will be implemented. Since early March, Russian oil-based sales have been under pressure as purchasers avoid the market.
In March, Russia’s inactive primary oil refining capacity more than doubled from a previous estimate, reaching millions of tonnes.
Some significant refineries, like Rosneft’s Tuapse facility, have shut down.
Though the West’s sanctions against Russia do not specifically target the energy sector, problems with finance, shipping, and insurance have made Russian energy less appealing to purchasers.
On Wednesday, oil increased around 3% as peace talks between Ukraine and Russia stagnated.
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