The White House today announced the release of a record 1 million barrels of oil per day for 180 days from US reserves in an effort to stabilize prices.
Four US sources said on Wednesday that the record issuance is equivalent to two days of global demand and will reach the market over several months.
And after consulting with allies and partners the head of state Joe Biden “It will herald the largest leakage of oil from our reserves in history,” the White House said in a statement.
The scale of this launch is unprecedented: the world has never released any oil from reserves of one million barrels per day. This record injection will provide a historic amount of supply that will fill the gap until the end of the year when domestic production picks up.
Excerpts from the White House statement
After the announcement, oil prices fell. Brent crude futures for May, which expires today, were down around $5, or 4.35%, to $108.50 a barrel at 11:54 a.m. ET.
And US crude (West Texas Intermediate) for May delivery fell more than $4 to 103.70 a barrel at the same time.
“The gradual release of 1 million barrels of oil over the next six months is a sign that a quick solution to the crisis in Ukraine, which has reduced oil supplies, is not expected,” said Susanna Streeter, chief investment officer and markets Hargreaves Lansdowne.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, agreed to abide by their current agreement and increase the production target for May by 432,000 barrels per day.
* With Reuters and Agence France-Presse
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