Oil prices fell this morning, continuing to react negatively to reports of oil sales from the U.S. strategic reserve. April Brent futures on London’s ICE Futures Exchange stood at $84.76 a barrel, down $0.82 (0.96%) from the previous session’s close. At the close of trading on Tuesday, those contracts fell by $1.03 (1.2%) to $85.58 per barrel.

Oil prices are dropping — more details

The price of WTI futures for March at electronic auctions of NYMEX was $78.30 per barrel at that time, which was $0.76, down 0.96% from the end of the previous session. The day before, the contract dropped by $1.08 (1.4%) to $79.09 per barrel.

On the eve the Energy Department of the US announced its plans to sell 26 mln barrels of oil from strategic reserves (SPR) on the market this year. Sales will be carried out within the period from April 1 to June 30.

The fuel release from the reserves will come as part of agreements reached back in 2015 and is related to the execution of the state budget, Sevens Report Research editor Tyler Ritchie told MarketWatch.

“But when traders see a news headline on the screen about releasing oil from the strategic reserve, the first thing they think of is an increase in supply in the market, then they hit the ‘sell’ button first and only then ask questions,” he added.

Meanwhile, OPEC the day before raised its estimate of the demand for oil in 2023 by 100 thousand barrels per day — up to 101.87 million bpd. Oil consumption growth in OECD countries is expected to be 0.35 million bpd in 2023 and 1.96 million bpd in non-OECD countries.

The estimate of oil demand in the first quarter of 2023 is increased by 220,000 bpd from the previous forecast, to 101.26 million bpd; in the second quarter, it is increased by 50,000 bpd, to 100.7 million bpd. 90,000 bpd increased the forecast for the third quarter to 101.99 million bpd.

Also, American Petroleum Institute (API) data released on Tuesday night, Wednesday, indicated a 10.5 million barrel increase in U.S. inventories for the week ended February 10.

The official report on U.S. energy reserves will be released Wednesday. Analysts polled by Trading Economics expect on average an increase in oil reserves of about 1.2 million barrels.

Earlier, we reported that Goldman Sachs expects Brent prices to rise to $100 by December.