Oil prices have slipped after the US Government proposed to sell half of its strategic oil reserves from 2018 to 2027.
Brent crude futures LCOc1 fell by 43 cents to $53.44 a barrel, while the US West Texas Intermediate (WTI) futures CLc1 slipped by 42 cents and traded at $50.71, reported Reuters.
In its budget proposal, the US Government has planned to sell half of the country’s emergency oil stockpile in a bid to raise $16.5bn from October next year.
This proposal also supported ramping-up production in Alaska.
The budget proposal was released after the US President Donald Trump’s official visit to Saudi Arabia concluded, and will now be delivered to Congress.
If it becomes effective, the global oil market may suffer another price fall where OPEC along with other oil producers agreed to reduce output by 1.8 million barrels per day (bpd) to tighten the oversupplied market.
OPEC members are scheduled to meet on 25 May and are speculated to extend the oil curb deal to the second half of this year or to the first quarter of the next year.
Earlier, Saudi Arabia and Russia expressed their support to extend the deal.
Currently, the US strategic petroleum reserves are nearly 688 million barrels and their sale is set to further increase oil supplies and improve US production, which currently stands at 9.3 million bpd.