Around 11:10 a.m., Brent lost 1.18% to 84.57 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI), fell 1.39% to 77.96 dollars.
Oil prices fell further on Wednesday after the surprise decision by the US government to release millions of additional barrels from its strategic reserve and saw a possible accumulation of crude inventories in the United States.
Around 10:10 a.m. GMT (11:10 a.m. CET), a barrel of Brent from the North Sea for delivery in April lost 1.18% to 84.57 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in March, fell 1.39% to 77.96 dollars.
On Monday, the US government said it was going to sell 26 million barrels from US strategic reserves (SPR), to comply with a law passed in Congress almost ten years ago.
“The US government originally planned not to use it given that 180 million barrels had already been released from the SPR last year,” notes Carsten Fritsch of Commerzbank.
For the analyst, the announcement last week of Russia to cut its oil production by 500,000 barrels per day in March has certainly “prompted the American government to change its mind”.
The move surprised the market, according to Oanda analyst Craig Erlam, “given previous commitments to fill the reserve.”
At the same time, an “exceptional magnitude” increase in commercial crude oil reserves in the United States, reported on Tuesday by the industry federation, the American Petroleum Institute (API), is contributing to the drop in crude prices, stresses Mr. Erlam.
The API estimated on Wednesday evening that crude stocks jumped 10.51 million barrels last week, and those of gasoline by 846,000 barrels.
“If this report is confirmed later today” with weekly data from the U.S. Energy Information Agency (EIA), deemed more reliable, “we could continue to see” oil prices decline, says Craig Erlam.
Analysts are expecting a more modest increase of 2 million barrels in commercial crude reserves, and 1.5 million barrels for gasoline, according to the median of a consensus compiled by Bloomberg.
