US futures edge higher while oil drops as Biden weighs massive crude release

• US futures rose slightly Thursday while oil fell sharply as the Biden administration weighed up releasing crude from strategic reserves.
• Reports said the US could release around 180 million barrels of oil over several months to cool gas prices.

US futures rose slightly Thursday, while oil prices dropped sharply on reports that the administration of President Joe Biden is weighing up a huge release of crude oil into the market from strategic reserves.

S&P 500 futures were up 0.1%, Dow Jones futures were roughly flat, and Nasdaq 100 futures had risen 0.39%.

Brent crude, the international benchmark oil price, fell 4.29% to $108.58 a barrel. WTI crude dropped 5.24% to $102.16 a barrel.

Widespread media reports said the Biden administration is close to finalizing a plan to release around a million barrels of oil a day from strategic US reserves as it tries to address spiraling energy inflation.

The plan could see the US release up to 180 million barrels of oil over several months, according to the reports. It comes as the OPEC+ group of oil-producing countries, which includes Russia, refuses to agree to Western requests to sharply increase production.

"Ahead of the US election later this year, President Biden is under pressure to take measures against rising inflation and to reduce US energy dependence on external factors such as OPEC+'s decisions and the Ukraine war," Victoria Scholar, head of investment at trading platform Interactive Investor, said.

Oil prices have soared in 2022, driven by a recovery in demand as lockdowns have ended and the disruption caused by Russia's invasion of Ukraine. Brent crude started the year at around $79 a barrel, with the rise in prices adding to already very strong inflationary pressure.

Asian stocks fell overnight after China reported weak manufacturing data. The country's CSI 300 index fell 0.74%, while Tokyo's Nikkei 225 slipped 0.73%.

European stocks were slipped in morning trading Thursday, with the continent-wide Stoxx 600 index down 0.14%.

US stocks were on track for a solid increase in March. They remained down for the year, however, with the Federal Reserve's withdrawal of economic support and Russia's invasion of Ukraine weighing on equities in the first quarter.

The benchmark S&P 500 was down 3.4% for the year as of Wednesday's close. The Dow Jones was 3.1% lower and the tech-heavy Nasdaq 100 was off by 7.7%.

Bond yields eased, as the fall in oil prices suggested inflationary pressures may cool. The yield on the key 10-year US Treasury note was down 1.5 basis points to 2.34%, having started the year at around 1.63%.

Alongside the trajectory of oil prices, investors will also be closely watching the March jobs report, due out Friday. Economists expect the US economy to have added 490,000 jobs over the month.

Peace talks between Russia and Ukraine are also due to resume online on Friday. Russia has said this week's in-person peace talks made "substantial progress." But Western officials have cast doubt on Russia's commitment to the talks, suspecting they could be cover for the army to regroup.

Read more: The founder of a commodities ETF provider managing over $1.5 billion shares his outlook for 8 assets that have experienced major supply chain disruption and elevated prices during the Ukraine crisis