Oil falls as the US decides to sell oil from its strategic reserves

2 min read | October 08, 2021 01:17 PM AEDT | By Arpit Verma

Oil falls as the US decides to sell oil from its strategic reserves — Image source: Source: © Argus456 | Megapixl.com

Higher-than-expected crude oil inventories in the US

Crude oil prices have been weighted by a higher-than-expected crude oil inventory in the last week. As per the US Energy Information Administration, the US stocks rose dramatically by 2.3 million barrels against the expectations for a dip of 418,000 barrels.

Russia on the other hand was boosting gas supplies to Europe in response to the energy crunch and stabilise the market amid skyrocketing gas prices.

OPEC | Source: © Gumpapa | Megapixl.com

The prices of both the oil benchmarks surged to record high levels after the Organisation of the Petroleum Exporting Countries (OPEC) along with its allies decided to stick to their original plan of increasing the output gradually, as planned in July 2021. The cartel agreed to ramp up the production by 400,000bpd per month till April 2022 to phase out the existing 5.8 million bpd production cut.

Bottom Line

Crude oil prices tumbled on Thursday as the US decided to sell out oil from its strategic reserves, a move to cool down skyrocketing oil and gas prices.

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