Oil prices plunged in and out of negative territory on Friday ahead of a meeting of International Energy Agency (IEA) member nations to discuss the release of emergency oil reserves, along with a US supply increase.
The benchmark Brent and WTI contracts were both on track for their biggest weekly declines in two years at 13 percent and 12 percent respectively.
Oil prices fluctuated throughout the day, driven by optimism about an increase in US supply and fears about Russian demand for ruble gas payments.
Brent oil futures were down 0.5 percent to about $104 a barrel by 1055 GMT. US West Texas Intermediate (WTI) crude futures fell 37 cents, or 0.4%, to $99.91. On Thursday, Brent oil futures for the prior period, which ended yesterday, crashed 5.6 percent to close at $107.91.
US West Texas Intermediate (WTI) crude futures fell nearly 1 percent to the latest trade at $99.39 a barrel, after rising to $101.75; the contract was down 7 percent on Thursday.
The US announced the most significant release of crude oil from its Strategic Petroleum Reserve (SPR) of 1 million barrels per day for six months starting in May.
Indeed, on Thursday, US President Joe Biden announced a release of 1 million barrels per day (bpd) for six months beginning in May, the most significant release ever from the SPR.
International Energy Agency (IEA) member countries will meet Friday to discuss a further oil spill that would follow their March 1 agreement to release about 60 million barrels, Reuters reported.
While that planned US release will likely cover the disruption to Russian gas, oil-producing countries stuck to their modest supply plans in May, despite pressure to use their spare capacity to further ramp up production.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies including Russia, has stuck to plans to increase 432,000 barrels per day to its May production target, despite Western pressure to add more.
Investors are also concerned about the impact of the Russian president’s demand for gas payments in rubles from today, or risk a supply freeze in what Germany called “blackmail.”
However, oil prices could change course if the release is scaled back or delayed or if the volumes delivered are lower than those stated by the White House, consultancy Eurasia Group said in a note.
