Oil prices drift lower, set for 3% weekly fall due to massive stocks release

Oil prices drifted lower on Friday and were set to drop around 3% for the week as consuming countries’ planned release of 240 million barrels from emergency stocks offset some concerns over reduced supplies from Russia due to western sanctions.

Brent crude futures edged lower by 55 cents, or 0.6% to $100.03 a barrel at 0403 GMT after gaining more than $1 in the early morning.

U.S. West Texas Intermediate (WTI) crude futures lost 34 cents, or 0.4%, to $95.67 a barrel.

Analysts said the emergency oil release, amounting to about 1 million barrels per day from May to the end of the year, might cap price rises in the short term, but would not fully cover volumes lost if more countries impose sanctions against Russia over its invasion of Ukraine, which Moscow calls a “special operation”.

The release may deter producers, including the Organization of the Petroleum Exporting Countries (OPEC) and U.S. shale producers, from accelerating output increases even with oil prices around $100 a barrel, they said.

Investors are also assessing the fundamentals in the oil market amid uncertainties over slowing demand in China, where cities have been locked down due to the latest wave of coronavirus infections, and the loss of supplies from Russia.