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Oil price falls as US releases more emergency crude reserves

Oil prices fell on Thursday as the U.S. announced a “historic release” of its reserves, easing pressure on the $ 23 billion treasury market, which is on track to record its worst quarterly performance.

Brent crude oil, the international oil index, fell 4.9% to $ 107.91 a barrel, after the White House said It will release an additional million barrels a day from the state’s emergency stockpile for the next six months. The publication is an effort to cool oil prices that have risen since Russia’s invasion of Ukraine, which has exacerbated rising inflation.

Meanwhile, the OPEC + group of oil-producing countries said it would aim to increase production by 432,000 barrels a day in May, continuing the monthly plan agreed last year to gradually replace output cuts at the start of the epidemic.

The yield on the 10-year US Treasury bill, which is reversed in price and strengthens global fundraising costs, fell by 0.03 percentage points to 2.32%.

This benchmark yield has more than doubled since reaching a low in early August, as supply chain disruptions linked to the corona crisis have brought inflation to decades-highs.

“When oil prices go down, inflation expectations go down and that has helped bonds rise,” said Banu Bawiya, chief strategist at UBS’s investment banking unit.

The Bloomberg index of total returns from the Treasury fell 5.6% this year as of Wednesday’s close, putting it on track to publish the weakest quarterly performance since the index was established in 1973.

Germany’s 10-year yield, which is trading significantly below US credit rates, reflecting the European Central Bank’s looser monetary policy, fell 0.1 percentage points to 0.54%.

In stock markets, the Wall Street S&P 500, 4% lower this year, was 0.6% lower as of mid-afternoon on Thursday. The high-tech Nasdaq Composite was down 0.7%, down 8% this year.

The moves came as data showed that the US Federal Reserve’s preferred inflation index – the core index of personal consumption spending that excludes the volatile food and energy sectors – rose 0.4% in February from the previous month. 5.4% – the fastest rate in about 40 years.

European stock markets fell on Thursday when the Stoxx 600 meter lost 0.9%. The decline lowered the regional index by 6.4% in the first three months of 2022, marking the worst quarter in two years. The UK’s FTSE 100 closed down 0.8 percent on the day, but up 1.8 percent in the quarter.

Stoxx 600 Bar Chart (Percent Change) showing European stocks worst quarter in two years

Oil prices have risen by almost 40 percent in 2022, A higher spur By Moscow’s invasion of Ukraine and Western sanctions on exports from Russia, which is the third largest oil producer in the world behind the US and Saudi Arabia.

The release of a 180-million-barrel reserve by the U.S. would reduce the amount of “price destruction as a result of the price” needed to restore supply and demand for balance, analysts at Goldman Sachs estimated.

“It will remain, however, a release of oil inventory, not a continuous source of supply for years to come,” warned Goldman analyst Damian Corblyn in a comment to clients.

In Asian stock markets, Hong Kong’s Hang Seng Index fell 1.1%, while China’s Shanghai and Shenzhen’s CSI 300 fell 0.7%. Japanese Topix was down 1.1%.

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Oil price falls as US releases more emergency crude reserves Source link Oil price falls as US releases more emergency crude reserves

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