Crude oil prices came under pressure on Friday ahead of a meeting of consuming nations to discuss a new release of emergency oil reserves alongside a huge planned released by the United States.
U.S. West Texas Intermediate (WTI) crude futures dipped 0.23% to $100.22 a barrel while Brent rose to 0.01% to $104 a barrel.
The main factor behind Thursday’s fall was U.S. planned release and on Friday the two benchmarks headed for a weekly loss of around 13%, underscoring their biggest in two year.
International Energy Agency (IEA) member countries are set to meet on Friday to discuss a further emergency oil release that would follow their March 1 agreement to release around 60 million barrels.
Earlier on Thursday, U.S. President Joe Biden announced a release of 1 million barrels per day for six months starting in May. That will be the largest release ever from the U.S. Strategic Petroleum Reserve (SPR).
Traders are eyeing to see how much oil the IEA countries agree to release.
“Previous releases from the SPR have taken time to reach the market and have had little impact on prices,” ANZ Research analysts said in a note.
“The scale of the proposed release is large enough to mostly, or even completely, fill the supply deficit in the crude oil market for a period,” Commonwealth Bank commodities analyst Tobin Gorey said, as reported by Bloomberg.
“The action would likely cap prices for that period, after which the market would then be relying on OPEC+ to increase production,” he said.
Meanwhile The Organization of the Petroleum Exporting Countries and allies including Russia, together called OPEC+, stuck to plans to add a modest 432,000 barrels per day of supply in May, despite western pressure on Saudi Arabia and the United Arab Emirates to use their spare capacity to boost output further.