Oil prices fall after truce in Middle East conflict: SPR By Reuters

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© Reuters. FILE PHOTO: A worker checks a tank in the Nahr Bin Umar oilfield, north of Basra, Iraq March 22, 2022. REUTERS/Essam Al-Sudani

By Stephanie Kelly

NEW YORK (Reuters) – Oil prices fell on Sunday at the start of Asian trade, after the United Arab Emirates and the Iran-aligned Houthi group welcomed a truce that would end military operations on the border Saudi-Yemeni, alleviating some concerns about potential supply issues.

This week’s first losses come after oil prices stabilized at around 13% last week – their biggest weekly drop in two years – when US President Joe Biden announced the biggest release of US oil reserves. never done.

futures fell $1.01, or 1%, to $103.38 a barrel at 2223 GMT. WTI crude futures fell 84 cents, or 0.9%, to $98.43 a barrel.

The United Arab Emirates (UAE) has welcomed the announcement of a UN-brokered truce in Yemen, the official UAE news agency WAM reported on Saturday. The Iran-aligned Houthi group, which is fighting a coalition including the United Arab Emirates in Yemen, also welcomed the truce.

The national truce is the first in years in Yemen’s seven-year conflict and will allow fuel imports into Houthi-held areas and some flights from Sanaa airport, a United Nations envoy said on Friday. .

“It was a supply threat, and a ceasefire would reduce that supply threat,” said Price Futures Group analyst Phil Flynn.

Market participants have been worried about global supply since Russia invaded Ukraine in late February. Sanctions imposed on Russia following the invasion disrupted oil supplies and pushed oil prices to nearly $140 a barrel, the highest in about 14 years.

On Thursday, Biden announced a release of 1 million barrels per day (bpd) for six months from May, which at 180 million barrels is the largest release ever by the US Strategic Petroleum Reserve (SPR). ).

On Friday, member countries of the International Energy Agency pledged another coordinated oil release at a special meeting, according to Japan’s industry ministry.

Still, “when you look at the SPR release, there are still a lot of questions about how they’re going to extract all that oil,” Flynn said. “We’ll have to wait and see.”

Meanwhile, Russian energy giant Gazprom (MCX:) said on Sunday it was continuing to supply Europe via Ukraine in line with European consumer demands.

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