Oil prices plunged six percent on Thursday amid the consideration by the US to release about 180 million barrels from its strategic petroleum reserve (SPR) — the largest in the nearly 50-year history of the country’s reserve.
Brent crude futures fell 6.06 percent to $107.4 a barrel at 06.40 GMT+1.
US West Texas Intermediate futures for May delivery fell 6 percent to $100.9. a barrel.
The development comes a few hours before the commencement of the meeting of the Organisation of Petroleum Exporting Countries (OPEC) and its allies, including Russia.
It is anticipated that the oil cartel would stick to the oil output considering its trend over the past months and current market realities.
US President Joe Biden would give remarks later on Thursday announcing the plan — three sources had told Reuters – an approach aimed at lowering prices that have risen to records following Russia’s invasion of Ukraine.
“If it turns out to be as much as that, it would be significant and so would certainly help to a certain extent to fill the shortfall, but not all of it,” Warren Patterson, head of commodities strategy at ING, told Reuters.
“Another key question is whether this volume would be part of a wider coordinated release.”
Mohammad Barkindo, secretary-general of OPEC, had called on world leaders to collaborate on ensuring a stable flow of global energy supplies.