Crude oil prices fell by around $5 a barrel on Thursday following reports that the Biden administration was planning to tap into its strategic reserve, a move that comes after the Russian invasion of Ukraine and subsequent sanctions have caused global oil prices to soar.
A deep pump for oil production stands behind a barbed wire fence. Oil prices fell sharply at a high … [+]
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Brent crude futures for May fell nearly $5.50 to $107.98 a barrel at one point on Thursday, before settling at around $109 a barrel at around 2 a.m. ET.
The May futures contract is set to expire later on Thursday and the June futures were also down $4.40 and trading at $107 per barrel.
The domestic WTI Crude futures for May were down nearly $5 to $102.8 per barrel early on Thursday after briefly slipping down to $100.85 a barrel.
Late on Wednesday, Reuters reported that the Biden administration was planning to release up to 180 million barrels of oil over several months from the country’s Strategic Petroleum Reserve (SPR).
President Joe Biden is expected to announce the move in a speech on Thursday where he will outline his administration’s effort to tackle high fuel prices.
If the Biden administration decides to release 180 million barrels from its strategic reserve as reported by Reuters, it would be the largest withdrawal in its nearly 50-year history.
Earlier this month, Brent crude surged to around $139 per barrel, the highest it had been in nearly 14 years. The steep surge in oil prices came as Russia, one of the world’s largest producers of oil, was hit by a bevy of sanctions after it began invading Ukraine in February. Since then, the U.S. has banned all imports of Russian oil and several international refiners have since been reluctant by it as well.
United States weighs largest ever draw from emergency oil reserve (Reuters)