Oil prices dipped in and out of the negative territory on Friday ahead of a meeting of International Energy Agency (IEA) member nations set to discuss a release of emergency oil reserves alongside a supply boost by the US.
The benchmark Brent and WTI contracts were both on course for their most significant weekly falls in two years at 13 per cent and 12 per cent, respectively.
Oil prices oscillated through the day, driven by the optimism of a US supply boost and fears of Russia’s demand for rouble gas payments.
Brent crude futures were down 0.5 per cent to about $104 a barrel by 1055 GMT. US West Texas Intermediate (WTI) crude futures were down 37 cents, or 0.4%, at $99.91. On Thursday, Brent crude futures for the previous period, which expired yesterday, crashed 5.6 per cent to close at $107.91.
US West Texas Intermediate (WTI) crude futures were down nearly 1 per cent to last trade at $99.39 per barrel after rising to a high of $101.75; the contract had slumped 7 per cent on Thursday.
The US announced the most significant release on record of crude 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, starting in May, the most significant release ever from the SPR.
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, Reuters reported.
While that planned release from the US is likely to cover the disruption of Russian gas, oil-producing countries stuck to their plans of modest supply in May, despite pressure to use their spare capacity to boost output further.
Indeed, OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies including Russia, stuck with plans for an increase of 432,000 bpd to their May output target despite Western pressure to add more.
Investors also fret about the impact of the Russian President’s demand for gas payments in roubles starting today or risk a supply cut-off, which Germany termed “blackmail.”
However, oil prices could reverse course if the release is scaled back or delayed or if delivered volumes are less than those mentioned by the White House, consultancy Eurasia Group said in a note.