By Gina Lee
Investing.com – Oil was up on Thursday morning in Asia, regaining some of its losses from the previous session when it tumbled more than 5% to a three-week low, as big oil releases helped give the black liquid a boost.
Brent oil futures jumped 1.41% to $102.50 by 1:08 AM ET (5:08 AM GMT) and WTI futures rose 1.24% to $97.42.
The International Energy Agency (IEA) will release 60 million barrels in addition to a 180-million-barrel Strategic Petroleum Reserve release announced by the U.S. during the previous week.
However, “in addition to the enormous global reserves release, demand destruction and recession are currently the only price-lowering mechanism in a world devoid of inventory buffers," SPI Asset Management managing director Stephen Innes told Reuters.
The latest release plus the IEA's coordinated release announced on Mar. 1 equates to one million barrels per day in extra supply from May to the end of 2022, which would cap prices in the near term, added National Australia Bank (OTC:NABZY) analyst Baden Moore.
"The additional supply reduces the near-term upside risk to the market and likely avoids the need for refinery cuts in the near term," Moore said in a note, before adding a note of caution, "but the need to restock reserves, expected in 2023, adds to the forward market tightness where the fundamental supply outlook remains unchanged, tilting the price risk to the upside."
Talks between Iran and the U.S. to revive a 2015 nuclear agreement continues to make slow progress and is delaying the return of Iranian oil to the market. Political decisions are needed on both sides to overcome the remaining issues, according to negotiators.
Meanwhile, Wednesday’s U.S. crude oil supply data from the U.S. Energy Information Administration showed a build of 2.421 million barrels for the week to Apr. 1. Forecasts prepared by Investing.com predicted a 2.056-million-barrel draw, while a 3.449-million-barrel draw was recorded during the previous week.
Crude oil supply data from the American Petroleum Institute released the day before, showed a build of 1.08 million barrels.