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Brent crude futures for May fell $6.95, or 6.13%, to $106.50 a
barrel by 1057 GMT. The May contract expires on Thursday and the
most actively traded June futures were down $6.66 at $104.78,
after earlier falling by $7 a barrel.
U.S. West Texas Intermediate futures for May delivery fell
$7.28, or 6.75%, to $100.54 a barrel, after touching a low of
$100.16.
The record SPR oil release is the equivalent to two days of
global demand and would hit the market over several months, four
U.S. sources said on Wednesday, as the White House tries to
lower fuel prices.
"Desperate times, clearly call for desperate measures and
clearly the Biden administration believes the spike in oil
prices warrants this move to eat into the country’s emergency
supplies," said Susannah Streeter, senior investment and markets
analyst at Hargreaves Lansdown.
"A drip release of 1 million barrels of oil is on the cards for
the next six months, a sign that there is not expected to be a
quick resolution to the crisis in Ukraine, which has squeezed
oil supplies."
Goldman Sachs analysts said the move would help the oil market
to rebalance in 2022 but was not a permanent fix.
"This would remain, however, a release of oil inventories, not a
persistent source of supply for coming years. Such a release
would therefore not resolve the structural supply deficit, years
in the making."
International Energy Agency (IEA) member countries are due to
meet on Friday at 1200 GMT to decide on a potential collective
oil release, a spokesperson for New Zealand's energy minister
said on Thursday.
The Organization of the Petroleum Exporting Countries (OPEC) and
allies including Russia meet on Thursday and are expected to
stick with a planned increase in their May output target.
Oil rose by around 3% on Wednesday as peace talks stalled
between Ukraine and Russia, the world's second-largest oil
exporter.
Western financial sanctions imposed on Moscow over its invasion
of Ukraine have disrupted its crude oil and oil product exports.
Russia calls its actions in Ukraine a "special operation".
(Reporting by Florence Tan and Isabel Kua in Singapore; editing
by David Goodman and Jason Neely)
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