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Oil prices drop as Biden considers releasing reserves

Oil prices drop as Biden considers releasing reserves

Oil prices have fallen sharply after reports that the US is set to take new steps to bring down high fuel costs.

The Biden administration is reportedly considering the release of up to 180m barrels of oil in the coming months from the Strategic Petroleum Reserve.

If confirmed, this will be the largest-ever release since the reserve was created in 1974.

The war in Ukraine has rocked global energy markets in recent weeks over concerns that supplies will be cut.

In afternoon trade in Asia, US oil benchmark West Texas Intermediate was 5.4% lower at $102 a barrel, while Brent Crude was down by 4.6% at around $108.

The soaring cost of fuel has become a major political issue in the US ahead of mid-term elections in November.

Without giving further details, the White House said that Mr Biden will deliver remarks at 13:30 local time (17:30 GMT) on Thursday, on "his administration's actions to reduce the impact of [Russian President Vladimir] Putin's price hike on energy prices and lower gas prices at the pump for American families".

News of the potential major release of oil by the US came as the Organization of the Petroleum Exporting Countries (Opec) and its allies including Russia were due to meet on Thursday.

The group of major oil producing nations, which is known as Opec+, is expected to stick to its existing deal to gradually increase production.

The cost of oil has jumped in recent weeks, with Brent Crude hitting $139 a barrel earlier this month after Russia's invasion of Ukraine and sanctions slapped on Moscow by the US and its allies.

Energy prices have fallen back since then, but Brent Crude is still almost 70% higher than it was a year ago.

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