Oil prices set to open after largest weekly fall in two years

Oil futures were set to open for Asian trade on Sunday, after both Brent and US crude benchmarks posted their biggest weekly falls in two years last week as the United States announced the largest ever release from the US Strategic Petroleum Reserve.

Both contracts settled down around 13 per cent for the week. On Thursday, US President Joe Biden announced a release of 1 million barrels per day (bpd) of crude oil for six months from May, which would amount to 180 million barrels.

On Friday, member countries of the International Energy Agency committed to another coordinated oil release in an extraordinary meeting, according to Japan’s industry ministry.

Still, “when you look at the release from the SPR, there are still a lot of questions about how they’re going to get all that oil out of there,” said Phil Flynn, an analyst at Price Futures Group. “We’ll have to wait and see.”

Trade has been volatile since Russia’s invasion of Ukraine in late February.

Energy markets worldwide were roiled and prompted concern about global supply when sanctions imposed on Russia over the invasion disrupted oil supplies and drove oil prices to nearly $140 a barrel, the highest in about 14 years.

Some bearish news over the weekend could add some relief to prices.

The Russian state-owned energy giant Gazprom (GAZP.MM) said on Sunday it was continuing to supply natural gas to Europe via Ukraine in line with requests from European consumers.

Meanwhile, the United Arab Emirates (UAE) has welcomed the announcement of a U.N.-brokered truce in Yemen and the halt of all military operations there and on the Saudi-Yemeni border, the UAE’s state news agency WAM reported on Saturday. The Iran-aligned Houthi group, which has been fighting a coalition including the UAE in Yemen, also welcomed the truce.