Crude oil futures lowered over one percent for the second week in a row on the back of the largest-ever release from US crude reserves and news of a coordinated release by other International Energy Agency (IEA) members from emergency stockpiles.
The oil price rally cooled down over the past two weeks, with oil prices declining to levels last seen prior to Russia’s invasion of Ukraine. Pandemic-related lockdowns in Shanghai, slowing US oil demand growth, and a historic strategic petroleum reserve release have all contributed to the sell-off. Interestingly, medium-term prices have hardly budged as near-term oil prices have fallen by over 20 percent, indicating a still-bullish longer-term outlook.
Brent, the international benchmark for two-thirds of the world’s oil, edged lower by $1.61 (-1.54 percent) to $102.78 from $104.39 on a week-on-week (WoW) basis. The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $1.01 a barrel (-1.02 percent) to $98.26 from $99.27 on a weekly basis.
The price for Opec Basket slipped marginally from $107.74 to $100.12 on a week-on-week basis, showing a decrease of $7.62 (-7.07 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
The price of Russian Sokol slipped by $0.79 (-0.85 percent) to $92.18 from $92.97 on WoW basis. However, Arab Light prices witnessed an increase of $2.36 (+2.29 percent) to reach $105.58 from $103.22 a barrel on a weekly basis.
Member nations of the International Energy Agency will release 60 million barrels combined over the next six month with United States matching that amount as part of its 180 million barrel release announced in March. —TLTP
