According to two individuals acquainted with the move, President Joe Biden is planning to schedule the release of about 1 million barrels of crude oil per day from the country’s strategic petroleum reserve in an effort to control energy prices, which have risen as the US and its allies have imposed harsh sanctions on Russia over its attack on Ukraine.
The declaration might come as early as Thursday, whenever Biden is scheduled to speak on the administration’s strategy to address soaring gas costs, according to the White House. The duration of the release has yet to be determined, but it might last a few months. The individuals talked asked to remain anonymous in order to have a head start on the judgment.
Rising oil prices haven’t enticed producers to increase output, posing a dilemma for Biden. Inflation hit a 40-year record in February, and also the price of fuel and gasoline increased when Russia invaded Ukraine, lowering the president’s support. Crude oil was roughly $105 a barrel on Wednesday, rising from approximately $60 a year prior.
At the time of writing, Brent futures were down by 5.97% at $107.48. Meanwhile, the WTI futures were down by 5.60% at $102.22, while still being above the $100 mark. The sudden drop in oil prices was anticipated because of the aforementioned news that broke out. Yesterday, the oil prices paced up higher.
According to a poll conducted by the Dallas Federal Reserve last week, oil companies have become more concentrated on satisfying the interests of investors. Investor pressures to maintain “capital discipline” amidst inflated prices was criticized by 59 percent of the CEOs polled, whereas government involvement was blamed by less than 10%.
The regular withdrawal of reserves might be a significant sum, narrowing the domestic manufacturing imbalance in comparison to February 2020, just before coronavirus triggered a sharp drop in oil supply.
Moreover, the OPEC meeting took place recently and its participants unanimously agreed on sticking to output targets of 432,000 barrels of crude oil per day.
