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International oil prices fell further on Friday following the historic decision by the Biden administration to release about 180mn barrels of oil from its strategic reserves over the next six months.
President Joe Biden said yesterday that the move was designed to lower “painful” petrol prices that were harming the finances of many households in America.
“My plan is going to help ease that pain today and safeguard against tomorrow,” Biden said. He suggested the price at the pump could decrease by the “better part” of anything between “10 cents to 35 cents a gallon”.
Biden has faced criticism and waning approval ratings over surging fuel prices, which have risen 50 per cent in the past year to hit record levels.
The new release of 1mn barrels a day was by far the biggest ever announced and will last six months, draining almost a third of the US Strategic Petroleum Reserve. The drawdown would take the reserve to its lowest level since 1984.
But oil investors were sceptical that the release would have a long-term effect on crude prices.
“History shows that SPR releases are not particularly effective at controlling [oil] prices,” said Dan Pickering, founder of Pickering Energy Partners, an investment group. “You’re not fixing a structural problem of supply and demand.”
Oil prices are on track for their biggest weekly fall in two years, according to Reuters. The US West Texas Intermediate crude futures contract was down $1.02 at $99.26 a barrel this morning after slumping 7 per cent yesterday. Brent crude futures, the international benchmark, slid 79 cents to $103.92 a barrel, after dropping 5.6 per cent on Thursday.
More on Ukraine:
Ukraine attacks Russia: Local authorities in the Russian city of Belgorod claimed two Ukrainian military helicopters carried out a cross-border air raid on a fuel depot earlier today in what would be the first strike by Ukraine on Russian soil since the war began.
Military briefing: Ukrainian forces have made several territorial gains around the capital and elsewhere in the country in recent days by exploiting the Russian army’s vulnerabilities. Meanwhile, the blame game in Russia is getting worse.
Markets: Global dealmaking fell to its lowest level since the start of the coronavirus pandemic in the first three months of the year as surging inflation, tougher regulation and the war in Ukraine led to a slowdown in mergers and acquisitions. The benchmark S&P 500 ended the quarter down nearly 5 per cent.
Roman Abramovich: The Antiguan government has established that two yachts moored in the Caribbean island belong to the sanctions-hit oligarch, confirming a Financial Times investigation.
Mariupol: Russia’s assault on the besieged Ukrainian port has continued despite the Kremlin’s promises of a ceasefire, according to Kyiv. Meanwhile, more than 2mn refugees have fled to Poland. Here are their stories, in their own words.
Opinion: The FT View is that Moscow is struggling to find counter-sanctions that do not harm its own economy. At some point, the west will have to talk to the enemy. That will mean doing a deal with Putin, writes Edward Luce.
Twitter Spaces: FT journalists Edward Luce, Gideon Rachman, Henry Foy and Polina Ivanova yesterday discussed the possible outcomes of the war on Twitter.
Thanks for reading FirstFT Americas and here’s the rest of today’s news — Gordon.
Five more stories in the news
1. Toshiba surges after biggest shareholder backs Bain buyout plan Shares in Toshiba rose more than 6 per cent today after Bain Capital secured the backing of the company’s largest shareholder and opened talks with other investors on a potential deal to take the 140-year-old Japanese conglomerate private.
2. Amazon workers in Staten Island pull ahead in union vote A grassroots campaign to create the first-ever union at an Amazon facility in the US has taken a significant lead in voting. Workers at a warehouse known as JFK8 in the New York borough of Staten Island had voted in person over a five-day period that ended on Wednesday. The Amazon Labor Union was ahead by a margin of 1,518 votes to 1,154 at the end of counting yesterday.
3. Centrist pulls out of Brazil’s polarised presidential race Sérgio Moro, a former judge who led a sweeping anti-graft crackdown in Brazil, has pulled out of the country’s presidential race. His exit means October’s general election is likely to be a two-horse race between incumbent far-right president Jair Bolsonaro and leftwing former leader Luiz Inácio Lula da Silva.
4. Shanghai extends Covid lockdown measures China’s financial centre is to extend strict lockdown measures in many parts of the city that were expected to resume normal life today. The city is ramping up efforts to contain an outbreak of largely asymptomatic cases of Covid-19.
5. Abu Dhabi state funds were used to buy NSO Mubadala Capital, a state-owned investment company, has been an investor since 2019 in the Israeli cyberweapon maker, whose Pegasus spyware has been traced to the phones of journalists, activists and the estranged wife of Dubai’s ruler.
The days ahead
Ukraine crisis Leaders of the EU and China meet for a “difficult” virtual summit with Russia and Ukraine at the top of the European agenda. The International Energy Agency will hold an emergency meeting of oil consuming countries to discuss a new release of strategic reserves alongside the plan by the US to pump massive supplies starting in May to cool soaring oil prices.
Economic data The US is forecast to have recorded another month of robust jobs growth in March. Data, released by the Bureau of Labor Statistics later this morning, is expected to confirm employers in the world’s largest economy added 490,000 jobs last month.
Fifa World Cup draw The Doha Exhibition and Convention Center plays host to the draw for the group stages of this year’s World Cup which will be held in Qatar in November and December and see France trying to defend its title. Here’s a guide for what to expect. (Guardian)
Elections Hungarian president Viktor Orban will seek a fourth successive term on Sunday despite concerns over his ties to Putin. Serbia holds a general election the same day, while Costa Rica has a presidential run-off.
What else we’re reading
Corporate America’s ‘what if’ mindset American companies are starting to warn against using non-domestic supply chains. So, what does this mean for investors? Judging from recent conversations with C-suite executives, there are at least three practical implications, as Gillian Tett outlines.
Why some of the most feared activist investors are no longer so hostile Billionaire activists like Carl Icahn, Bill Ackman, Daniel Loeb and Nelson Peltz have run some of the most hostile proxy battles Wall Street has ever seen in the past decade. Now some are changing tack and taking a more low-key approach. James Fontanella-Khan and Antoine Gara explain why.
What Ukraine war means for the age of the autocrat Since 2000, the rise of the strongman leader has become a central feature of global politics. But it is possible that the catastrophe of Russia’s invasion of Ukraine will permanently discredit this style of politics, writes Gideon Rachman.
Hong Kong’s property tycoons braced for further losses Hong Kong’s property tycoons have amassed billions as a result of their near-monopoly over some of the world’s most valuable real estate. But after pandemic restrictions hit the city’s economy and drove residents out of the territory property prices are expected to drop by as much as 10 per cent this year.
AI industrialisation offers great promise and some peril On the peanut butter spectrum, artificial intelligence is moving from smooth to crunchy, as the powerful tool is being used for everything from search engine optimisation to accelerating drug discovery. But private companies are reaping almost all the gains, writes John Thornhill.
Crypto vs gold: the search for an investment bolt hole The market in the yellow metal may be a bubble, but at least it’s a 6,000-year-old one. Meanwhile, bitcoin looks like a short-term fad, argues John Plender in this personal finance column.
It was the 1953 movie Roman Holiday, in which Audrey Hepburn causes traffic chaos on a Vespa in Rome, that introduced scooters to the world. Ahead of auctioneer H&H’s first vintage scooter sale, Iain Macauley documents the history of these two-wheeled machines long loved by Mods and moviegoers alike.
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