Forexpros – Crude oil futures came under pressure for a second day on Wednesday, amid mounting speculation Western nations were considering the release of strategic oil reserves, while growing supplies in the U.S. and receding concern over a disruption to Iranian oil exports further weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD106.38 a barrel during European morning trade, dropping 0.89%.
It earlier fell by as much as 0.95% to trade at a two-day low of USD106.34 a barrel.
Crude prices extended losses from the previous session after France’s Le Monde newspaper said that French President Nicolas Sarkozy was for the release of emergency oil stocks.
The report added that France was in contact with the U.S. and the U.K. over possibly releasing oil reserves to control rising prices.
Oil prices came under pressure Tuesday by market talk that a U.S. Energy Department aide said the U.S. was considering the release of strategic oil reserves.
Last week, reports surfaced that France and other industrialized nations were considering a release from strategic stockpiles.
U.S. President Barack Obama discussed releasing emergency oil supplies with U.K. Prime Minister David Cameron on March 14 but the leaders reached no agreement.
Though the report was denied by U.S. officials, it has still added a new dimension to the recent price increases, putting investors on watch for any government intervention.
Meanwhile, Iran’s Foreign Minister Ali Akbar Salehi said earlier Wednesday that renewed nuclear talks between Iran and six world powers, dubbed the P5+1 group of nuclear negotiators, are expected to take place on April 13.
The six world powers include, the U.S., the U.K., France, Germany, Russia and China. A venue for the talks will be finalized in the coming days.
U.S. President Barack Obama said Sunday that there is still time to resolve the dispute over Iran diplomatically, but that the window is closing.
Meanwhile, oil traders were looking forward to the U.S. Energy Information Administration’s closely-watched weekly report on U.S. stockpiles of crude and refined products later in the day.
The report was expected to show that U.S. crude oil stockpiles rose by 2.5 million barrels last week, while gasoline supplies were forecast to decline by 1.7 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 3.6 million barrels last week, above expectations for a gain of 2.8 million barrels.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery retreated 1.03% to trade at 124.25 a barrel, with the spread between the Brent and crude contracts standing at USD17.87.
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