Sonali Paul

MELBOURNE (Reuters – Friday’s oil prices jumped ahead of a meeting between consuming nations where they will discuss a release of new emergency oil resources and a planned large release by the United States.

U.S. West Texas Intermediate crude oil futures dropped 6 cents per barrel to $100.22 per barrel at 0057 GMT, after trading as high a $101.75. On Thursday, the contract fell 7%.

Futures gained 5 cents to $104.76 per barrel after falling 5.6% Thursday. On Thursday, the May contract was terminated at $107.91.

Thursday’s fall was caused by the planned U.S. Release. The benchmark contracts suffered a loss of 13% each on Friday, the largest in their history.

The members of the International Energy Agency (IEA), will meet Friday at 1200 GMT to discuss a second emergency oil release. This would be in addition to their March 1 deal to release approximately 60 million barrels.

Joe Biden, the U.S. president announced Thursday that 1,000,000 barrels would be available per day starting May. This will mark the U.S. Strategic Petroleum Reserve’s (SPR) largest ever release.

This is done to replenish oil supplies that Russia has cut off following the invasion of Ukraine. Moscow refers to its actions in Ukraine as “special operations” for disarming its western neighbor.

Traders will be watching to see how much oil is released by the IEA, but don’t anticipate it having a long-term affect on the market.

“Previous SPR releases have been slow to get on the market, and they have not had any impact on prices,” ANZ Research analyst said in a note.

Biden called on U.S. producers for increased output. However, ANZ analysts stated that the huge SPR release might backfire and discourage more producers.

Tobin Gorey, a commodities analyst at Commonwealth Bank, stated that the scale of the release proposed is sufficient to fill the market’s supply gap for a time.

He stated that the action could likely limit prices during this period and then market participants would rely on OPEC+ for increased production.

Despite western pressure from Saudi Arabia and the United Arab Emirates for them to increase their production, the Organization of the Petroleum Exporting Countries (OPEC+) and its allies, including Russia, remained firm in their plans to produce a mere 432,000 barrels of oil per day.