© Reuters. Oil Heads for Big Weekly Drop as Biden Seeks to Cool Pump Prices
(Bloomberg) — Oil is poised for the biggest weekly loss in almost two years after the Biden administration ordered an unprecedented release of strategic U.S. reserves to tame rampant prices.
West Texas Intermediate futures fluctuated near $100 a barrel on Friday, and are down around 12% for the week. The U.S. plans to release 1 million barrels a day for six months, although analysts warned any reprieve would be short-lived. The news filtered into the market early on Thursday, just before the OPEC+ alliance gathered to ratify a modest increase in supply for May.
Russia’s war in Ukraine has roiled global commodity markets and driven up the price of everything from food to fuels, challenging governments seeking to encourage economic growth after the pandemic. It’s led to tumultuous trading in the oil market, with wild swings during sessions throughout March.
President Joe Biden blamed a spike in gasoline prices this year on his Russian counterpart Vladimir Putin and the invasion of Ukraine, calling it “Putin’s price hike.” He also criticized U.S. oil companies that have been reluctant to boost production. The cost of retail gasoline at the pump was already high prior to the invasion, but the war has turbocharged prices worldwide.
The market also faced pressure this week from concerns about Chinese demand as the world’s biggest oil importer implements a series of lockdowns to curb a virus resurgence. Those curbs are starting to have an impact on the economy, with manufacturing activity contracting in March.
©2022 Bloomberg L.P.
Source: Investing.com
