Oil futures fell Tuesday, after news reports said the U.S. would follow through with a plan to sell another 26 million barrels of crude from its Strategic Petroleum Reserve.
West Texas Intermediate crude for March delivery
fell $1.17, or 1.5%, to $78.97 a barrel on the New York Mercantile Exchange.
April Brent crude
the global benchmark, was down 95 cents, or 1.1%, at $85.66 a barrel on ICE Futures Europe.
Back on Nymex, March gasoline fell 1.1% to $2.504 a gallon, while March heating oil
edged up 0.2% to $2.913 a gallon.
March natural gas
wasup 3.8% at $2.496 per million British thermal units.
The release comes after the U.S. last year drained 180 million barrels from the reserve as part of an effort to combat a jump in prices after Russia’s invasion of Ukraine last February. The coming release is separate from that effort, having been previously mandated by Congress, though there had been speculation it would be canceled by the Biden administration given the low remaining level of reserves.
“This stance appears to have surprised the markets, as many had been expecting the 2023 release to be canceled and for the resupplying of reserves to start. Instead, the market will receive an extra 26 million barrels from the U.S. oil reserves, with prices falling immediately after the announcement,” said Ricardo Evangelista, senior analyst at ActivTrades, in a note.
Investors were also awaiting the Tuesday release of a monthly update on supply and demand forecasts from the Organization of the Petroleum Exporting Countries.