Sonali Paul

MELBOURNE, (Reuters) – Oil prices rose on Friday, but are expected to drop around 3% this week as consuming nations agree to free 240m barrels from their emergency stockpiles to offset the Russian disruption.

Futures rose 0.1%, 13 cents per barrel, at 0139 GMT. U.S. West Texas Intermediate crude futures gained 0.4% to $96.38 per barrel, rising 35 cents or 0.4%.

Analysts believe that the oil emergency release of about 1,000,000 barrels of oil per day, from May through the end of 2018, might limit price increases in the short-term, but not completely cover the volumes of Russia’s invasion of Ukraine sanctions. Moscow refers to this as a “special operations”.

This is the biggest oil market release since 1980’s stockpile. However, the outcome will not change the fundamentals. “It is likely to delay additional increases in output by key producers,” ANZ Research analysts stated in a note.

According to them, the oil price of $100 a bar may discourage some producers (including the Organization of the Petroleum Exporting Countries or OPEC), from accelerating their output rises despite the low oil prices.

In the meantime, any fall in oil prices will be limited by the European Union considering a ban of Russian oil after its embargo Russian coal.

Innes wrote that the SPI Asset Management managing director Stephen Innes said “In the Court of Public Opinion, Pressure is Mounting on Brussels to Act” in a memo.