Oil heads for biggest weekly drop in more than 10 years

Oil headed for the biggest weekly loss in more than 10 years after the Biden administration ordered an unprecedented release of U.S. strategic reserves to tame rampant prices.

Oil headed for the biggest weekly loss in more than 10 years after the Biden administration ordered an unprecedented release of U.S. strategic reserves to tame rampant prices.

West Texas Intermediate swung between gains and losses Friday, and was down more than US$13 dollars this week, the most since 2011. The U.S. plans to release 1 million barrels a day for six months. IEA nations also agreed to release another round of crude stockpiles, with volumes being decided later. U.S. President Joe Biden expects allies to release an additional 30 million to 50 million barrels.

Citigroup Inc. said the U.S. appeared to have taken steps to ensure that it could deliver the promised volumes, despite having never drawn down that much oil from the reserve stockpile. Goldman Sachs Group Inc. cut its price forecasts for this year but boosted the estimate for 2023, arguing that the move won’t fix a longer-term supply crisis.

Releasing 1 million barrels a day from the U.S. Strategic Petroleum Reserve “can easily be accomplished,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Biden’s decision follows rocketing gasoline prices in America and concerns about supply shortages following Russia’s invasion of Ukraine. The war has roiled global commodity markets and driven up the price of everything from fuels to food. It has also led to tumultuous trading in oil, with massive intraday swings throughout March. WTI traded in almost a US$37 range last month.