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Crude oil closed lower on Thursday (March 31) after the United States confirmed it will draw down 1 million barrels per day from its reserves to curb rising oil prices.
- WTI crude futures were down $7.54, or 7%, at $100.28 a barrel.
- BRENT crude futures were down $5.54, or 4.9%, at $107.91 a barrel.
To counter rising oil prices, the U.S. government has agreed to release strategic oil reserves once again. Since President Biden took office, oil prices have continued to rise and have been exacerbated by the situation in Ukraine.
“The first part of the President’s plan is to immediately increase supply by doing everything we can to encourage domestic production now and through a historic release from the Strategic Petroleum Reserve to serve as a bridge to greater supply in the months ahead,”according to a White House press release.
It was the third time in six months that oil was drained from reserves.
At the last meeting of OPEC and OPEC+, it was decided to stick to the original agreement. OPEC+ will increase production by 432,000 barrels per day in May, even though the United States and other oil-importing countries have asked OPEC+ to increase production more than it has in the past. Oil prices rose above $139 per barrel this month. This is the highest level since 2008.
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