Oil closes with a drop of 6.99% after the announcement of the release of US crude reserves

Oil closes with a drop of 6.99% after the announcement of the release of US crude reserves

Oil fell this Thursday after the president Joe Biden announced that will allocate 180 million barrels of US reserves to relieve the market.

In New York the barrel WTI in May contracts, it fell 6.99% to $100.28. In London the barrel of Brentalso for the month of May, fell 6.44% to settle at 107.91 dollars.

Biden announced that in the next 180 days he will release a million barrels per day “to increase supply (…) until production accelerates at the end of the year.”

This day’s was largest release of strategic reserves in the United States that were already at their lowest point in 20 years.

“The last use of reserves (50 million barrels in November) was not significant enough and was totally overshadowed,” said Matt Smith, an analyst at Kepler. “This time they want it to have a strong impact,” he added.

“Is it worth giving up a million barrels a day to get a price cut of just $5 (a barrel)?” he asked.

“You would have thought that an announcement like this would have provoked a bigger reaction” in prices, he said. “Although this use of reserves will certainly help contain the market in the short term, it does not provide a long-term solution,” she said.



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