The White House today announced the release of a record 1 million barrels of oil a day for 180 days from US reserves in an attempt to stabilize prices.
The record release equates to two days of global demand and would hit the market over several months, four US sources said on Wednesday.
“Following consultations with allies and partners, President Joe Biden will announce the largest release of oil from our reserves in history,” the White House said in a statement.
The scale of this release is unprecedented: the world has never had a release of oil from reserves of 1 million barrels a day. This record injection will provide a historic amount of supply that will bridge the gap until the end of the year when domestic production picks up.
Excerpt from the White House statement
After the announcement, oil prices plummeted. May Brent crude futures, which expire today, were down about $5, or 4.35%, to $108.50 a barrel at 11:54 am ET.
US crude (WTI) for May delivery fell more than $4 to 103.70 a barrel at the same time.
“A gradual release of 1 million barrels of oil over the next six months is a sign that a quick fix to the crisis in Ukraine, which has reduced oil supplies, is not expected,” said Susannah Streeter, senior investment and Hargreaves Lansdown markets.
Meanwhile, OPEC (Organization of Petroleum Exporting Countries and allies), which includes Russia, has agreed to stick to its existing agreement and increase its May production target by 432,000 barrels a day.
*With Reuters and AFP