By Dhirendra Tripathi
Investing.com – Shares of energy companies were in the red in Thursday’s trade amid reports that the U.S. plans a release of up to 180 million barrels from its Strategic Petroleum Reserve, the largest in the near-50-year history of the SPR.
Integrated energy majors, as well as standalone explorers and refiners, were all trading lower in Europe and in premarket in the U.S.
ConocoPhillips (NYSE:COP) and Diamondback Energy (NASDAQ:FANG) fell the most, both down 3%, followed by Exxon Mobil (NYSE:XOM), Occidental Petroleum (NYSE:OXY) and Devon Energy (NYSE:DVN), all of whom fell 2.5% each.
Chevron (NYSE:CVX) and Marathon Petroleum (NYSE:MPC) were both down 1.5% while ADRs of BP (NYSE:BP) and Shell (NYSE:SHEL) traded 1.6% and 1.3% weaker, respectively.
The latest amount of U.S. oil release being considered is equivalent to about two days of global demand and will mark the third time the world’s biggest energy consumer has tapped its strategic reserves in the past six months.
While it is not clear if other friendly countries will join the U.S. in this exercise, the news sent the oil prices crashing.
Crude Oil WTI Futures for May delivery fell 6% while Brent Brent Oil Futures June futures traded 5.2% weaker.
Crude oil prices scaled 14-year highs earlier this month amid the Russia-Ukraine conflict. Those prices are hurting many European economies, many of which now face decades-high inflation.
Russia is among the top 3 oil producers and accounts for about 14% of the world's total supply, according to Reuters.
Sanctions and reluctance to purchase Russian oil could remove about 3 million barrels per day of Russian oil from the market, starting in April, the IEA has said. Russia exports 4 million bpd to 5 million bpd.
The outcome of Friday’s meeting of OPEC+ will be eyed to see if the oil cartel pays heed to U.S.’ request for a quicker increase in output.