Strategic reserve release news puts pressure on crude oil closed lower and hit its biggest weekly percentage drop in two years

On April 2, crude oil futures closed lower and hit the largest weekly percentage decline in nearly two years
, as the news of the release of the largest crude oil reserves in history by the United States and the coordinated release of emergency reserves by other members of the International Energy Agency.

West Texas Intermediate crude for May delivery on the New York Mercantile Exchange fell $1.
01 to $99.
27 a barrel, its lowest close since March 16
.
WTI crude tumbled nearly 13 percent this week, its biggest weekly decline in two years
.
Front-month contracts rose 33% in the first quarter, compared to 4.
8%
in March.
The price of Brent crude oil, the global benchmark, fell 32 cents, or 0.
3%,
to $104.
39 a barrel in June.

Natural gas rose 1.
4% to $5.
72 per million British thermal units in May, up more than 28% in March and more than 51%
in the quarter.
The index is up 1.
9%
this week.
Gasoline rose nearly 0.
1 percent in May to $3.
154 a gallon, and heating oil rose 1.
9 percent in May to $3.
424 a gallon
.
Both are down more than 8%
this week.

U.
S.
President Joe Biden announced on Thursday that he would release 1 million barrels per day of the Strategic Petroleum Reserve over the next six months to ease the impact
of soaring gasoline prices after the Russian-Ukrainian conflict.
Analysts say the move could dampen oil prices in the short term, but they see it as only a temporary solution to the global supply crunch, especially as
the war in Ukraine continues.

Troy Vincent, senior market analyst at DTN, said the release of the U.
S.
SPR "cannot balance the market and offset the structural supply issues facing the global market," noting that in the coming weeks, the market expects supply losses of more than 2 million barrels
in Russia alone.

International Energy Agency members, including the United States, most of Europe, Canada, Mexico, Japan and South Korea, said Friday they also agreed to release oil from emergency reserves to join the U.
S.
operation
.
The International Energy Agency plans to announce details
early next week.

But last week's volatility sent crude prices lower on front-month contracts, with U.
S.
benchmark WTI and Brent falling 12.
8% and 11.
1%,
respectively, according to Dow Jones Market Data.
Both indicators saw the largest weekly percentage decline since late April 2020
.

Geopolitical headlines continued to attract attention on Friday (April 1) after Russia accused Ukrainian forces of attacking an oil facility
north of the border between the two countries.
Despite fighting on the ground, the two sides continued peace talks
via videoconference.

OPEC+ met on Thursday (March 31) and approved a previously agreed plan to raise its May production target by 432,000 barrels
per day.

Analysts at Sevens Report Research wrote in Friday's newsletter: "OPEC+ continues to ignore calls from the United States and other Western countries to raise output to calm market tensions
.
The group remains very self-disciplined in the current high price environment, which provides favorable conditions
for the coming months and quarters.
The bottom line is that once Russia and Ukraine finally reach a ceasefire, a sell-off news reaction is expected, although the current long-term trend remains clearly bullish
.
”