The White House said on Tuesday it would make 50 million barrels of oil available from the US Strategic Petroleum Reserves as part of a coordinated effort with other major economies to help cool oil prices.
Brent crude futures were up 4 cents, or 0.05%, to $79.74 a barrel by 1256 GMT, after earlier dropping to as much as $78.55 a barrel.
US West Texas Intermediate (WTI) crude futures were down 33 cents, or 0.43%, at $76.42.
AMRITA SEN, ENERGY ASPECTS CHIEF OIL ANALYST
"A lot will depend on how much of this is new oil versus repackaged oil that was being released as SPR anyways. Moreover a lot of this oil will need to be refilled later in 2022. So while weighing at the prompt, it is bullish for the back end of the crude curve. At the same time, this may lead OPEC+ to pause their January production increases, netting off a lot of the SPR release."
CARSTEN FRITSCH, COMMERZBANK ANALYST
"This is more than suggested by sources before. The question is the time horizon of the release and how OPEC+ will react. Some delegates said that OPEC+ might rethink its strategy to increase output by another 400,000 bpd at next week's meeting. To put things into perspective, 50 million barrels is equivalent to a production hike by 1.6 million bpd for one month or by 1 million bpd for seven weeks. This is quite significant."
GIOVANNI STAUNOVO, UBS ANALYST
"Big headline number but details provide a less strong narrative. 50 million barrels from the US is above the market expectations, but the effective volume is much smaller (only 32mb). 18 million barrels of the 50 million barrels were already planned to be sold next year, now this amount is sold at the start of the year instead of later in 2022. And the 32 million barrels needs to be paid back with interest next year and the following years (2022 to 2024). Also the amount being so far mentioned from other countries joining the US looks more symbolic. SPR releases are a tool used to cover temporary production disruptions and are not useful to fix imbalances caused by lack of investment and still rising demand."