Oil Prices Set for Weekly Fall on Stockpile Releases

Oil prices rose on Friday but remained on course for a second weekly fall after countries announced plans to release crude from their strategic stocks.

Brent crude futures were up 71 cents, or 0.7% to $101.29 a barrel at 1056 GMT. U.S. West Texas Intermediate (WTI) crude futures gained 85 cents, or 0.9%, to $96.88 a barrel.

Both contracts are set to fall for a second consecutive week, with Brent on course for a 3% slide and WTI for a 2.3% decline.

Member nations of the International Energy Agency will release 60 million barrels over the next six months with the United States matching that amount as part of its 180 million barrel release announced in March.

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, ANZ Research analysts said in a note.

“Despite these unprecedented volumes, doubts remain as to whether this incoming flood of supply will address the shortfall in Russian crude,” PVM analyst Stephen Brennock said.

While Russia has found Asian buyers, Western buyers are shunning cargoes.

Russia’s production of oil and gas condensate fell to 10.52 million barrels per day (bpd) on April 1-6 from a March average of 11.01 million bpd, two sources familiar with the data told Reuters on Thursday.

The U.S. Congress voted to ban Russian oil on Thursday, while the European Union is considering a ban.

But demand uncertainties kept a lid on prices Friday after Shanghai extended its lockdown amid fast rising COVID-19 infections.

Further pressure came from the strengthening U.S. dollar, after signals that the U.S. Federal Reserve could raise the federal funds rate another 3 percentage points by the end of the year.