The price of crude oil fell in response to the U.S. President Donald Trump proposed sale of half the country’s strategic oil reserves in spite of cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers.
Brent crude futures were trading down 23 cents, or 0.4 percent, at $53.64 per barrel at 0450 GMT. U.S. West Texas Intermediate (WTI) futures (CLc1) were at $50.91, down 22 cents, or 0.4 percent.
The White House budget plan would gradually sell off half of the nation’s emergency oil stockpile to raise $16.5 billion from October 2018, documents released on Monday showed. It also suggested opening up more production in Alaska.
Any large release of U.S. strategic reserves would jolt oil markets, where the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, have pledged to cut output by 1.8 million barrels per day (bpd) in order to tighten the market.
OPEC, led by Saudi Arabia, and other participating producers will meet on May 25 and are expected to extend the period of the cut from just the first half of this year to all of 2017 and the first quarter of 2018.
Releasing reserves would add supplies to already high and rising U.S. production (C-OUT-T-EIA) of 9.3 million bpd, not far off levels of top suppliers Saudi Arabia and Russia.
