Brent crude futures dropped 4% to below $109 per barrel on Thursday following reports that the Biden administration is considering a plan to release around 1 million barrels of oil per day for about six months from US reserves. The White House is expected to announce the plan later Thursday, aimed at lowering gasoline prices that have hit record levels following Russia' s invasion of Ukraine. The international benchmark erased a 3% gain on Wednesday driven by supply concerns as peace talks between Russia and Ukraine appeared to have stalled. The moves also came as US crude stocks fell by 3.4 million barrels last week, way bigger than the 1 million barrel drop forecast. Moreover, major oil producers are unlikely to boost output above their agreed 400,000 barrels per day ahead of an OPEC+ meeting on Thursday.

Brent crude futures rose more than 3% to above $113 per barrel on Wednesday, after losing more than 8% over the previous two sessions, as investors were monitoring the situation in Ukraine and global supplies remain tight despite weakening demand from China. Major oil producers will meet to discuss their supply policy for May and the group has signaled it will stick to its existing plan and ratify an increase of 430,000 bpd in output despite crude flow disruptions due to Russia&rsquo s war in Ukraine. On the data front, the latest API report showed US crude stocks fell by 3 million barrels last week, triple the decline expected by analysts. The Energy Information Administration will release official data later Wednesday. The benchmark Brent crude is set for a fourth consecutive month of gains, after reaching the highest since 2008 at near $140 per barrel on March 7th, as demand recovery from the coronavirus pandemic gathered pace while the war in Europe squeezed the already tight market.

Oil Recoups Losses As API Reports Large Crude Inventory Draw