Oil prices dipped in and out of negative territory on Friday ahead of a meeting of International Energy Agency (IEA) member nations set to discuss a release of emergency oil reserves alongside a huge planned release by the United States.
The benchmark Brent and WTI contracts were both on course for their biggest weekly falls in two years at 13% and 12%, respectively.
Brent crude futures were down 6 cents, or 0.1%, to $104.65 a barrel by 1055 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 37 cents, or 0.4%, at $99.91.
On Thursday, U.S. President Joe Biden announced a release of 1 million barrels per day (bpd) for six months, starting in May, the largest release ever from the U.S. Strategic Petroleum Reserve (SPR).
Members of the IEA are scheduled to meet at 1200 GMT on Friday to discuss a further emergency oil release.
Oil prices could reverse course, however, if the release is scaled back or delayed or if delivered volumes are less than those mentioned by the White House, consultancy Eurasia Group said in a note.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies including Russia, on Thursday stuck with plans for an increase of 432,000 bpd to their May output target despite Western pressure to add more.
“The looming flood of U.S. barrels does not change the fact that the market will struggle to find enough supply in the coming months,” PVM analyst Stephen Brennock said.
“The U.S. release pales in comparison to expectations that 3 million bpd of Russian oil will be shut in as sanctions bite and buyers spurn purchases.”
In a sign of bearish signal for demand, China’s commercial hub of Shanghai ground to a halt on Friday after the government locked down most of the city’s 26 million residents aiming to stop the spread of COVID-19.