Oil Extends Losses as US Mulls Strategic Reserve Sales

Oil Extends Losses as US Mulls Strategic Reserve Sales

Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang province, China August 22, 2019. REUTERS/Stringer/Files

Oil prices fell sharply on Thursday, extending losses from the previous session, as the United States said it was considering selling oil from its strategic reserves and as Russia said it was ready to stabilize the natural gas market.

Brent crude prices fell $1.24, or 1.5%, to $79.84 a barrel by 0918 GMT, after falling to a session low of $79.08. WTI crude futures fell $1.69, or 2.2%, to $75.74 a barrel, having hit a session low of $74.96.

Both contracts fell about 2% on Wednesday.

"The crude market might be less tight should the United States tap the strategic crude reserves and if Russia manages to send more natural gas to Europe, this might result in less substitution from natural gas to crude," said UBS analyst Giovanni Staunovo.

US Energy Secretary Jennifer Granholm said on Wednesday that the administration is considering tapping the country's Strategic Petroleum Reserve (SPR) to cool a surge in gasoline prices, the Financial Times reported.

Granholm also did not rule out a ban on crude exports, which was lifted in 2015.

Goldman Sachs said a likely SPR release, which could be up to 60