Plans to sell oil from Strategic Reserves in U.S.

Oil prices continued on their downward trajectory yesterday and recorded multi-week lows. Brent fell to as low as $46.4 per barrel, which was its lowest level since mid-September. WTI dropped to a two-month low of $42.6 per barrel. The almost complete absence of any counter-reaction to the heavy losses suffered in the past two days of trading shows just how embattled the market is at present. 

The U.S. is considering selling a total of 58 million barrels of crude oil from its Strategic Reserves between 2018 and 2023. This has no immediate impact on the oil market, and would at most influence very long-term forward contracts.

In view of the negative market sentiment at present, however, oil prices at the front end of the forward curve have also come under pressure because speculative financial investors are taking this opportunity to jettison further long positions, notes Commerzbank.