WTI plunges below $100.00 on Biden’s 180 million barrel oil release
|- Oil prices are settling below $100.00 on additional oil release from US’s SPR.
- An additional oil release of 180 million barrels is equivalent to about two days of global demand.
- The DXY has been underpinned ahead of the US Nonfarm Payrolls on Friday.
West Texas Intermediate (WTI), futures on NYMEX, has tumbled below $100.00 on Thursday after US President Joe Biden announced a release of one million barrels per day for six months out of their Strategic Petroleum Reserve (SPR) from May. Oil prices nosedive more than 6% on Thursday amid expectation of a less deviation in the demand-supply mechanism of the black gold.
To tame the galloping inflation, US President Joe Biden has urged oil drilling companies to exploit their unused capacities and pump more oil for bringing price stability to the oil market. This is the time to shift preference to the individuals and American families from prolonged investors. This is the third time in the last six months when the US administration has announced an oil release from the SPR. An additional oil release of 180 million barrels is equivalent to about two days of global demand, as per Reuters.
However, the additional oil release of one million barrels is unable to cover the three million barrels of oil from Russia and this kind of helicopter release of oil will not fix the structural deficit in global supply.
On the demand front, restrictions on men, materials, and machines in China amid lockdown measures due to the resurgence in Covid-19 has put a cumulative negative impact on the oil prices.
Meanwhile, the US dollar index (DXY) has climbed near 98.40 on negative market sentiment as investors are waiting for the US Nonfarm Payrolls, which are due on Friday.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.