WTI plunges below $100.00 on Biden’s 180 million barrel oil release
- Oil prices are settling below $100.00 on additional oil release from US’s SPR.
- An additional oil release of 180 million barrels is equivalent to about two days of global demand.
- The DXY has been underpinned ahead of the US Nonfarm Payrolls on Friday.
West Texas Intermediate (WTI), futures on NYMEX, has tumbled below $100.00 on Thursday after US President Joe Biden announced a release of one million barrels per day for six months out of their Strategic Petroleum Reserve (SPR) from May. Oil prices nosedive more than 6% on Thursday amid expectation of a less deviation in the demand-supply mechanism of the black gold.
To tame the galloping inflation, US President Joe Biden has urged oil drilling companies to exploit their unused capacities and pump more oil for bringing price stability to the oil market. This is the time to shift preference to the individuals and American families from prolonged investors. This is the third time in the last six months when the US administration has announced an oil release from the SPR. An additional oil release of 180 million barrels is equivalent to about two days of global demand, as per Reuters.
However, the additional oil release of one million barrels is unable to cover the three million barrels of oil from Russia and this kind of helicopter release of oil will not fix the structural deficit in global supply.
On the demand front, restrictions on men, materials, and machines in China amid lockdown measures due to the resurgence in Covid-19 has put a cumulative negative impact on the oil prices.
Meanwhile, the US dollar index (DXY) has climbed near 98.40 on negative market sentiment as investors are waiting for the US Nonfarm Payrolls, which are due on Friday.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
