Oil Falls Most in 2 Years After Oil Stockpile Release

(MENAFN- The Al-Attiyah Foundation) Oil settled lower on Friday as members of the International energy Agency (IEA) agreed to join in the largest-ever U.S. oil reserves release. Both brent and U.S. crude benchmarks settled down around 13% in their biggest weekly falls in two years after U.S. President Joe Biden announced the release on Thursday. Brent crude futures were down 32 cents, or 0.3%, at $104.39 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.01, or 1%, at $99.27. President Joe Biden announced a release of 1 million barrels per day of crude oil for six months from May, which at 180 million barrels is the largest release ever from the U.S. Strategic Petroleum Reserve. Member countries of the IEA did not agree Friday on volumes or the commitments of each country at their emergency meeting. The Organization of the Petroleum Exporting Countries and allies agreed on Thursday to stick to plans for an increase of 432,000 bpd to their May output target despite Western pressure to add more. U.S. energy firms last week added oil and natural gas rigs for a second week in a row but growth in the rig count remains slow as drillers continue to return cash to shareholders from high crude prices rather than boost production.

Asian Prices Stable but Russian Threat Remains a Risk

Asian spot liquefied natural gas prices were relatively stable last week but there was upside risk due to Russia's threat to cut off supply to Europe unless payments are made in roubles. The average LNG price for May delivery into north-east Asia was estimated at $35.00 per metric million British thermal units (mmBtu), unchanged from the previous week, industry sources said. In Asia, demand remained muted as buyers abstained from spot market purchases until there is more clarity on prices. But Japanese utilities were buying to replenish supplies following an earthquake on March 16. Meanwhile, Europe vowed to stay united against Russia's demand that they pay for its gas in roubles, as the threat of an imminent supply halt eased on Friday. The Kremlin said it would not immediately turn off the taps to Europe as payments on deliveries due after April 1 come in the second half of this month and May. That message, and signs that Europe would take a pragmatic approach, were a relief for markets. Russian piped gas flows into Europe have risen in the year to date. At the same time, high gas prices have been attracting LNG imports into Europe, which have also increased year to date, analysts said.

By: The Al-Attiyah Foundation

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