IEA members to release 60 mln barrels over 6 months
U.S. producers added 13 oil rigs in the week to April 8
Shanghai extends lockdown to cope with COVID-19
Brent drops 1.5%, while WTI dips 1% for the week
Oil prices slipped in early Asian trading, following the second straight weekly decline after world consumers announced plans to release crude from strategic stocks and as Chinese lockdowns continued.
As of 2202 GMT, Brent crude fell 38 cents to $102.40 a barrel while U.S. crude lost 16 cents to $98.18. Last week, Brent dropped 1.5% while U.S. West Texas Intermediate slid 1%. For several weeks, the benchmarks have been at their most volatile since June 2020.
The market has been watching developments in China, where authorities have kept Shanghai, a city of 26 million people, locked down under its “zero tolerance” for COVID-19. China is the world’s biggest oil importer.
Member nations of the International Energy Agency (IEA) will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180 million barrel release announced in March.
The release could also deter producers, including the Organization of the Petroleum Exporting Countries (OPEC) and U.S. shale producers, from accelerating output increases even with prices around $100 a barrel, ANZ Research analysts said in a note.
However, the OPEC+ group of oil-exporting nations has not shown any inclination to increase its output targets to more than the 400,000 barrels per day it has been adding monthly as part of a restoration of supply cuts.
The IEA release would amount to roughly 2 million barrels of daily supply for the next two months – plus another 1 million bpd from the United States for four months after that. It is unclear whether that will offset the shortfall in Russian crude after that nation was hit with heavy sanctions following its invasion of Ukraine.
Russia’s production of oil and gas condensate fell to 10.52 million barrels per day (bpd) for April 1-6 from a March average of 11.01 million bpd.
Source: Reuters
