Oil slumps to three-week low after Fed minutes, big IEA reserve release announcement | Reuters

Oil slumps to three-week low after Fed minutes, big IEA reserve release announcement | Reuters

Oil futures fell sharply on Wednesday after large consuming nations said they would release oil from reserves to counter tightening supplyand hawkish minutes from the U.S. central bank that bolstered the dollar.

Selling accelerated into the close, leaving both the Brent and West Texas Intermediate benchmarks at their lowest closing levels since March 16. Brent crude futures settled down $5.57, or 5.2%, at $101.07 a barrel, while U.S. crude fell $5.73, or 5.6%, to $96.23 a barrel.

Member states of the International Energy Agency (IEA) will release 120 million barrels from strategic reserves to try to quell price gains. The release will include 60 million from the United States, according to two sources familiar with the matter. That commitment forms part of the previous U.S. announcement of a 180 million-barrel reserve release. read more

This is the second time the IEA has released reserves this year and effectively boosts worldwide supply by roughly 2 million barrels a day for at least the next two months as the world tries to overcome the potential loss of Russian oil. The group collectively has about 1.5 billion barrels in strategic reserves.