Oil prices set to drop weekly on stock releases

A maze of crude oil pipes and valves are pictured during a Department of Energy visit to the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson/

LONDON, April 8 (Reuters) – Oil prices rose on Friday but remained on course for a second weekly decline after countries announced plans to release crude from strategic stockpiles.

Brent crude futures rose 71 cents, or 0.7%, to $101.29 a barrel at 10:56 GMT. U.S. West Texas Intermediate (WTI) crude futures gained 85 cents, or 0.9%, to $96.88 a barrel.

Both contracts are set to fall for a second consecutive week, with Brent on track for a 3% decline and WTI for a 2.3% decline.

International Energy Agency member nations will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180 million barrel release announced in March. Read more

The release could deter producers, including the Organization of the Petroleum Exporting Countries (OPEC) and U.S. shale producers, from accelerating production increases even with oil prices around $100 a barrel, said ANZ Research analysts in a note.

“Despite these unprecedented volumes, doubts remain as to whether this inflow of supply will solve the shortage of Russian crude,” said PVM analyst Stephen Brennock.

While Russia has found Asian buyers, Western buyers are shunning shipments.

Russian production of oil and gas condensates fell to 10.52 million barrels per day (bpd) from April 1-6, from an average of 11.01 million bpd in March, two sources told Reuters on Thursday. close to the data.

The US Congress voted to ban Russian oil on Thursday, while the European Union is considering a ban. Read more

But demand uncertainties restrained prices on Friday after Shanghai extended its lockdown amid rapidly rising COVID-19 infections. Read more

Further pressure came from the strengthening of the US dollar, after signals that the US Federal Reserve could raise the federal funds rate by another 3 percentage points by the end of the year. Read more

Additional reporting by Sonali Paul in Melbourne and Muyu Xu in Beijing; edited by Jason Neely

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