US President Joe Biden is set to announce a massive release of oil from the Strategic Petroleum Reserve in an attempt to lower gasoline prices by the medium term. OPEC will meet with Russia and other allies and is thought to be just a little “tap open”. U.S. personal spending and income data are expected, as well as the February update of the Fed’s preferred inflation gauge. Walgreens will report its earnings. And China’s manufacturing sector is slumping as restrictions due to COVID-19 dampen business activity. Here’s what you need to know about the financial market on Thursday, March 31.

1- Biden to announce oil release from SPR

According to various reports, US President Joe Biden will announce plans to release up to 1 million barrels of oil per day for 6 months from the Strategic Petroleum Reserve (SPR) as part of a new attempt to lower oil prices.

Biden is under pressure to lower gasoline prices enough to have a significant impact on inflation and neutralize it as an obstacle in the midterm elections due in the US in November.

The planned release is much larger than the recent attempts to lower prices earlier this year, and comes at a time when oil price dynamics have weakened. However, that doesn’t change the fact that the SPR was intended as a reserve in case of a physical shortage of oil, not as a mechanism to push the market one way or the other.

By 06:15 a.m. ET (11:15 a.m. GMT), WTI crude futures had fallen another 6.2% to $101.19 per barrel, while Brent crude was down 5.3% to $105.48 per barrel.

2. OPEC+ meeting, Lavrov seeks alternative oil buyers in India

Biden’s initiative is timed to coincide with the OPEC+ group’s latest monthly meeting, which is expected to approve another planned production increase of 400,000 bpd. The OPEC ministerial meeting will begin at 08:00 Eastern Time (12:00 GMT), with Russia and other countries joining half an hour later.

While Russian Deputy Prime Minister Alexander Novak is meeting with OPEC, Foreign Minister Sergei Lavrov is in New Delhi, where he is negotiating the terms of a mechanism that would allow India to pay for increased Russian oil supplies by bypassing the dollar-based financial system.

Russia’s oil system is still facing constraints due to a strike by oil buyers in Europe. Reuters reported that many refineries have either reduced or stopped operations due to the inability to find buyers abroad, and pipeline operator Transneft (MCX:TRNF_p) has reduced the amount of oil it accepts from major producers.

3. Data from the US will show pressure on consumer spending

The US will release personal income and spending data for February, which will likely be examined for any further evidence of a slowdown in activity as pandemic era savings come to an end.

January’s spending data showed a surprisingly strong 2.1% increase, but February’s figures are likely to be affected by the continued rise in consumer prices, additional data on which will be available in the Personal Consumption Price Index for February, which will be released at 08:30am ET (13:30 GMT).

In addition, weekly jobless claims in the US will be released, the number of which is expected to remain below 200k for the second week in a row.


The previous day’s data in Europe pointed to an increasing fight against stagflation: UK house prices rose to an 18-year high, German retail sales fell in February (even before Russia’s special operation in Ukraine), and French inflation was well ahead of expectations. The market is currently pricing in a policy tightening by the European Central Bank of about 60 basis points by the end of 2022.

4- U.S. market set for a mixed opening; Walgreens in focus

Stock indices in the US are set to open a little later mixed, with the sharp drop in oil prices over the past 2 days providing some support for equities despite lingering concerns over inflation and monetary tightening.

By 06:20am ET (11:20am GMT), the Dow Jones futures were down 11 points – remaining virtually unchanged – while the S&P 500 futures were up 0.1% and the Nasdaq 100 futures were up 0.3%. All 3 indices closed in the negative on Wednesday as hopes for a quick end to the conflict in Ukraine faded. President Vladimir Putin earlier told Italian Prime Minister Mario Draghi that there are no conditions for ending the special operation.

Stocks likely to be in the spotlight a little later are Walgreens Boots Alliance Inc (NASDAQ:WBA), which will report its quarterly earnings, and CVS Health Corp (NYSE:CVS), which reached a $484 million settlement in an opioid-related case on Wednesday. Intel Corporation (NASDAQ:INTC) could also come under scrutiny after it granted CEO Pat Gelsinger an additional stock option package. ISS’s proxy shareholder service opposed this package.

5. China’s factories are struggling with COVID-19, and Shanghai is set to extend its quarantine

China’s manufacturing sector contracted again in March, impacted by COVID-19-related restrictions and weaker demand from the US and Europe as pandemic-era stimulus programs wind down.

The country’s official business activity index (PMI) for the manufacturing sector fell to 49.5 from 50.2 amid continued problems with port and factory closures. The South China Morning Post newspaper reported the day before that Shanghai is likely to extend the quarantine in the Pudong district beyond its scheduled end date on Friday.

The impact of the production halt in China was evident in figures released by Swedish company H&M, whose quarterly profit came in well below expectations. In addition to the problems in China, the chain has also been forced to close stores in Russia, its sixth-largest market, and has accelerated its plan for net store closures this year.