Petro-politics roiled the market this morning as President Joe Biden plans a major release from the U.S. Strategic Petroleum Reserve, pushing down the price of West Texas Intermediate crude by almost 4% per barrel, to $103. Thus far, the stock market is not wowed, falling a bit in early trading.
The amount of oil to be released is 1 million barrels daily for several months, and news reports say that could total 180 million barrels. Right now, there are 568 million barrels is the reserve, according to the federal Energy Department’s data. If so, that would mean a one-third drawdown.
The stock market remained unimpressed after today’s open, with the S&P 500 off 0.24%. That follows Wednesday’s 0.63% dip, which snapped a four-day rally. Two previous oil reserve releases have failed to mute the upward movement of oil prices for long.
Also weighing on Wall Street sentiment were doubts that the Organization of the Petroleum Exporting Countries Plus, which includes Russia, would boost its oil output. The group is meeting today.
Few market observers express optimism about Russia-Ukraine talks resolving the war soon. Russia is a major contributor to the European Union’s energy needs, providing 27% of its oil imports and 40% of its natural gas.