By Gina Lee

– Oil was down on Friday morning in Asia and was set for a weekly loss of 3% after consuming countries agreed to release a total of 240 million barrels of oil from emergency stocks.

Brent oil futures fell 0.64% to $99.94 by 12:30 AM ET (4:30 AM GMT) and WTI futures were down 0.47% to $95.58.

International Energy Agency executive director Faith Birol tweeted that the organization “is moving ahead with a collective oil stock release of 120 million barrels (including 60 million barrels contributed by the U.S. as part of its overall draw from its Strategic Petroleum Reserve).” More details of specific contributions will be released soon, the tweet added.

The release will amount to about 1 million barrels per day from May to the end of 2022. It could cap price rises in the short term, but would not fully cover volumes lost from Russia due to sanctions for its invasion of Ukraine on Feb. 24, according to some investors.

"Although this is the biggest release since the stockpile was created in 1980, it will fail to ultimately change the fundamentals in the oil market. It is likely to delay further increases in output from key producers," ANZ Research analysts said in a note.

The release could also deter producers, including the Organization of the Petroleum Exporting Countries and U.S. shale producers, from stepping up output increases even with oil prices around $100 a barrel, the note added.

Meanwhile, the European Union (EU)’s consideration of a ban on Russian oil, following its plan to embargo Russian coal, will cap any losses for the black liquid in the short term.

"In the court of public opinion, pressure is mounting on Brussels to act, and if that pressure valve pops and the EU sanctions Russian oil, we could see Brent crude at $120 in a heartbeat," Stephen Innes, managing director of SPI Asset Management, said in his own note.