Oil stocks are on watch today as the price of crude oil falters.
The decline today comes amid reports that President Joe Biden is considering releasing a record amount of oil from America’s strategic reserves. At a news conference later today, Biden could announce that he is authorizing the release of 1 million barrels a day from the U.S. Strategic Petroleum Reserves. Over time, he could authorize the release of up to 180 million barrels.
That news has the price of oil down today, and with it, oil stocks are experiencing a great deal of volatility. This includes Exxon Mobil (NYSE:XOM), Devon Energy (NYSE:DVN) and Imperial Petroleum (NASDAQ:IMPP), all of which were down before trimming losses.
The price of West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is now at $103.80 a barrel, while Brent crude oil, the international benchmark, is at $108.30.
What Happened With Oil Stocks
Later today, Biden is scheduled to deliver remarks on gas prices, which continue to rise at the pumps. Since Russia first invaded Ukraine at the end of February, the U.S. price of regular gasoline has hit a record high of $4.33 per gallon.
Now, Biden plans to address these high prices. Investors should note that, earlier in March, he announced a coordinated release of oil from the reserves in conjunction with other countries. He also released 50 million barrels of oil from the strategic reserves last November, which, at the time, was the largest single release from the reserves in U.S. history. Releasing 1 million barrels a day for a prolonged period would be an unprecedented move.
Why It Matters
The U.S. reserves are a stockpile of 600 million barrels of crude oil that are stored in underground salt caverns in Louisiana and Texas. Analysts say that releasing oil from the reserves has only a limited impact on gas prices at the pump.
News that the White House is considering a big release of oil comes as OPEC+ is expected to announce that it is maintaining its current production targets and gradual increases, despite global supply constraints due to the ongoing invasion of Ukraine. The Biden administration has pressured OPEC+ to more drastically increase its output.
We’ll get the full picture of the plan for releasing more oil onto the market later today. However, oil prices and stocks are on watch on anticipation that the White House plans to flood the market with more supply to lower prices at the gas pumps and help consumers who are struggling with inflation that is running at a 40-year high.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.