Oil snaps back after sliding on back of IEA reserve release plan

Oil snaps back after sliding on back of IEA reserve release plan

© Photographer: Daniel Acker/Bloom

Oil storage tanks in Cushing, Oklahoma. Photographer: Daniel Acker/Bloomberg





Oil rebounded after a steep slump that was triggered by prospects for further crude releases from strategic reserves, the outlook for tighter U.S. monetary policy and weaker demand in virus-hit China.

West Texas Intermediate rose toward $98 a barrel after retreating by more than $5 on Wednesday after the International Energy Agency said that U.S. allies will deploy 60 million barrels from stockpiles. That’s on top of the 180 million-barrel release already announced by President Joe Biden.

Oil has been wracked by intense volatility over the past six weeks as Russia’s invasion of Ukraine roiled commodity markets. In response to the war, Washington and its allies have been trying to punish Russia economically, while also moving to stem the rise in energy prices that’s fanning already-elevated inflation. The scale of the combined crude releases is unprecedented.

“It looks like Asian buyers are taking advantage of lower prices,” said Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte. “The war is still going on, Russian sanctions are tightening, and there is still a structural deficit in oil supplies because of that, even with these SPR