Oil posted its biggest weekly loss in more than 10 years after the administration of US President Joe Biden ordered a release of US strategic reserves.
West Texas Intermediate (WTI) dropped 1 percent on Friday and more than US$14 this week, the most since 2011.
WTI was US$99.27 per barrel, down 12.8 percent for the week.
Photo: Reuters
The US plans to release 1 million barrels a day for six months.
International Energy Agency nations also agreed to release another round of crude stockpiles, with volumes to be decided later.
Biden expects allies to release an additional 30 million to 50 million barrels.
Citigroup Inc said that the US appeared to have taken steps to ensure that it could deliver the promised volumes, despite having never drawn down that much oil from the reserve stockpile.
Goldman Sachs Group Inc cut its price forecasts for this year, but boosted the estimate for next year, arguing that the move would not fix a longer-term supply crisis.
Releasing 1 million barrels a day from the US Strategic Petroleum Reserve “can easily be accomplished,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston, Texas.
Biden’s decision follows rocketing gasoline prices in the US and concerns about supply shortages following Russia’s invasion of Ukraine.
The war has roiled global commodity markets and driven up the price of everything from fuels to food.
It has also led to tumultuous trading in oil, with massive intraday swings throughout last month.
WTI traded in almost a US$37 range last month.
The US already tapped its reserves twice in the past six months, but that has done little to cool prices.
As much as 180 million barrels might be released this time.
“The market is short about 2 million barrels a day, if not more, from Russian supplies into the global market,” US Department of State energy security adviser Amos Hochstein said in an interview on Bloomberg Television.
The Biden administration’s giant oil release contrasts sharply with OPEC+, which on Thursday ratified a planned, modest production increase of about 430,000 barrels a day.
Also contributing to this week’s slide were concerns about Chinese demand as the world’s biggest oil importer implements a series of lockdowns to curb a resurgence of COVID-19.
Those curbs are starting to affect the Chinese economy, with manufacturing activity contracting last month.
Additional reporting by staff writer
European Central Bank (ECB) President Christine Lagarde is expected to step down from her role before her eight-year term ends in October next year, the Financial Times reported. Lagarde wants to leave before the French presidential election in April next year, which would allow French President Emmanuel Macron and German Chancellor Friedrich Merz to find her replacement together, the report said, citing an unidentified person familiar with her thoughts on the matter. It is not clear yet when she might exit, the report said. “President Lagarde is totally focused on her mission and has not taken any decision regarding the end of
French President Emmanuel Macron told a global artificial intelligence (AI) summit in India yesterday he was determined to ensure safe oversight of the fast-evolving technology. The EU has led the way for global regulation with its Artificial Intelligence Act, which was adopted in 2024 and is coming into force in phases. “We are determined to continue to shape the rules of the game... with our allies such as India,” Macron said in New Delhi. “Europe is not blindly focused on regulation — Europe is a space for innovation and investment, but it is a safe space.” The AI Impact Summit is the fourth
CONFUSION: Taiwan, Japan and other big exporters are cautiously monitoring the situation, while analysts said more Trump responses ate likely after his loss in court US trading partners in Asia started weighing fresh uncertainties yesterday after President Donald Trump vowed to impose a new tariff on imports, hours after the Supreme Court struck down many of the sweeping levies he used to launch a global trade war. The court’s ruling invalidated a number of tariffs that the Trump administration had imposed on Asian export powerhouses from China and South Korea to Japan and Taiwan, the world’s largest chip maker and a key player in tech supply chains. Within hours, Trump said he would impose a new 10 percent duty on US imports from all countries starting on
STRATEGIC ALLIANCE: The initiative is aimed at protecting semiconductor supply chain resilience to reduce dependence on China-dominated manufacturing hubs India yesterday joined a US-led initiative to strengthen technology cooperation among strategic allies in a move that underscores the nations’ warming ties after a brief strain over New Delhi’s unabated purchase of discounted Russian oil. The decision aligns India closely with Washington’s efforts to build secure supply chains for semiconductors, advanced manufacturing and critical technologies at a time when geopolitical competition with China is intensifying. It also signals a reset in relations following friction over energy trade and tariffs. Nations that have joined the Pax Silica framework include Japan, South Korea, the UK and Israel. “Pax Silica will be a group of nations
RSS