Oil fell slightly before today's meeting of IEA member states
Oil prices fell slightly on Friday, trading in a narrow range ahead of the consumer countries meeting to discuss the release of a new emergency oil reserve, accompanied by the US's grand plan.
Brent crude futures fell 8 cents to $104.63 a barrel at 0437 GMT after falling 5.6 percent on Thursday. The May contract expired on Thursday at $107.91.
West Texas Intermediate (WTI) crude futures fell 40 cents to $99.89 a barrel at 0437 GMT after climbing as high as $101.75. The contract fell 7% on Thursday.
The planned US SPR release led to Thursday's dips. On Friday, the two benchmark contracts each headed for a weekly loss of about 13%, the biggest in two years.
Member states of the International Energy Agency (IEA) will meet at 1200 GMT on Friday to discuss another emergency oil release that will follow the March 1 agreement to release approximately 60 million barrels of product.
On Thursday, the United States announced that it will release 1 million barrels of oil per day for six months starting in May. This will be the largest ever release from the US Strategic Petroleum Reserve (SPR).
The aim is to make up for the Russian oil supply, which was interrupted by sanctions following Moscow's invasion of Ukraine.
The scale of the proposed release matters whether it fills most or even all of the supply gap in the crude oil market for a while. The action will likely limit prices for that period, then the market will rely on OPEC+ to increase production.
Traders are focused on seeing the amount of oil released that IEA countries have agreed on, but they do not expect this to have a very long-term impact on the market. Because the previous versions took time to impact the market and had little impact on prices.
While US mills are urged to increase production, this major SPR release is likely to have counterproductive effects, which may discourage drillers from further investment.
The Organization of the Petroleum Exporting Countries and its allies, including Russia, have stuck to plans to add a modest 432,000 bpd in May, despite Western pressure on Saudi Arabia and the United Arab Emirates.
Meanwhile, the current lockdown restrictions in Shanghai, China's trade hub, are keeping concerns about continued weak fuel demand alive.
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