By Shadia Nasralla
LONDON (Reuters) – Oil prices dipped in and out of negative territory on Friday ahead of a meeting of the Member countries of the International Energy Agency (IEA) are set to discuss a release of emergency oil reserves alongside a huge release planned by the United States.
Benchmark Brent and WTI contracts were both on track for their biggest weekly declines in two years at 13% and 12%, respectively.
Brent crude futures were down 6 cents, or 0.1%, at $104.65 a barrel at 10:55 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 37 cents, or 0.4%, at $99.91.
On Thursday, US President Joe Biden announced a release of 1 million barrels per day (bpd) for six months, starting in May, the largest release ever by the US Strategic Petroleum Reserve (SPR).
IEA members are due to meet at 12:00 GMT on Friday to discuss a further emergency oil release.
However, oil prices could reverse course if the release is reduced or delayed or if delivered volumes are lower than those mentioned by the White House, consultancy Eurasia Group said in a note.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies including Russia, on Thursday stuck to plans to increase by 432,000 bpd over its May production target despite the Western pressure to add more.
“The impending flood of US barrels does not change the fact that the market will struggle to find sufficient supply in the months ahead,” said PVM analyst Stephen Brennock.
“The US publication pales in comparison to expectations that 3 million bpd of Russian oil will be stuck as sanctions bite and buyers reject their purchases.”
In a bearish signal for demand, Shanghai’s Chinese mall came to a halt on Friday after the government locked down most of the city’s 26 million residents in a bid to stop the spread of COVID-19 .
(Additional reporting by Sonali Paul in Melbourne and Isabel Kua in Singapore; editing by Jason Neely)
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