Commodity Market: WTI Crude Oil drops over 4% as the US weighs huge reserves release

Futures on US West Texas Intermediate Crude Oil retreated more than 4% on Thursday, as the United States is weighing the release of up to 180 million barrels from its strategic petroleum reserve over a few months to curb skyrocketing oil prices.

According to a report by Reuters, US President Joe Biden is expected to announce the reserves release later on Thursday in an attempt to push gasoline prices down from their record levels following Russia’s incursion into Ukraine.

“If it turns out to be as much as that, it would be significant and so would certainly help to a certain extent to fill the shortfall, but not all of it,” Warren Patterson, head of commodities strategy at ING, said in a reference to the 180 million barrel figure.

“Another key question is whether this volume would be part of a wider coordinated release.”

The reports of potential US oil reserves release outweighed an OPEC+ meeting, scheduled for later on Thursday. OPEC+ members are largely expected to continue with an existing agreement to gradually increase oil supply.

Yesterday WTI Crude Futures rose over 3% on lingering supply concerns, as cease fire talks between Russia and Ukraine have stalled.

Meanwhile, a spokesperson for Australia’s energy minister Angus Taylor said earlier today the International Energy Agency had called an emergency ministerial meeting at 12:00 GMT on Friday to discuss the state of the oil market.

As of 7:10 GMT on Thursday WTI Crude Oil Futures were losing 4.52% to trade at $102.95 per barrel. Earlier in the trading session the black liquid went down as low as $100.53 per barrel, which has been its weakest price level since March 29th ($98.44 per barrel).

At the same time, Brent Oil Futures were losing 4.60% on the day to trade at $107.40 per barrel. Earlier in the trading session the commodity went down as low as $106.83 per barrel, which has been its weakest price level since March 29th ($104.87 per barrel).

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $107.04
R1 – $109.53
R2 – $111.24
R3 – $113.73
R4 – $116.22

S1 – $105.33
S2 – $102.84
S3 – $101.13
S4 – $99.42

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $112.66
R1 – $114.66
R2 – $116.75
R3 – $118.75
R4 – $120.76

S1 – $110.57
S2 – $108.57
S3 – $106.48
S4 – $104.40