After several states announced that they are withdrawing 120 million

After several states announced that they are withdrawing 120 million

On Wednesday, April 6 this year, oil futures prices fell sharply after major fossil fuel consuming states announced they would release crude oil from reserves to counteract the effects of limited supply. A minute of the US central bank also contributed to this easing of the price, which strengthened the dollar, according to Reuters.

In comparison, oil sales accelerated to the close of the market, with reference prices for Brent and West Texas Intermediate falling to their lowest level since March 16.

Specifically, the price of Brent crude oil stabilized down $ 5.57, or 5.2%, to $ 101.07 per barrel, while US crude oil fell $ 5.73, or 5.6%. , at $ 96.23 per barrel.

In this context, the member states of the International Energy Agency (IEA) will release 120 million barrels from strategic reserves to try to quell price increases. This release will include 60 million barrels from the US, according to two sources with information on this subject, quoted by Reuters. The pledge is part of a previous US announcement of the release of 180 million barrels of oil from reserves.

In fact, this is the second time the AIE has released reserves this year, increasing the world’s supply by almost two million barrels a day for at least the next two months, as the world tries to overcome a possible stoppage of oil supplies. from Russia. The group together has nearly 1.5 billion barrels in strategic reserves.

In terms of oil, crude oil markets have been volatile for weeks, with prices rising amid concerns about Russia’s invasion of Ukraine and sanctions imposed by the United States and its allies against Moscow.

Recently, the market has recovered as a result of stockpiles and in the context of slowing demand in China, where a return of the pandemic has led to the quarantine of some cities, including Shanghai. Chinese refineries are avoiding signing new contracts with Russia, suggesting that Beijing is cautious about openly supporting Moscow during this period.

Meanwhile, a minute of the US Federal Reserve detailed how the US central bank plans to raise interest rates by 50 basis points, but opted for a smaller increase due to the war in Ukraine.

So the Fed’s minute suggests an aggressive approach in trying to dampen inflation, which has strengthened the US dollar. Oil prices often move in the opposite direction to the dollar because most crude oil transactions are made in US currency.