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Oil prices are pulling back sharply as investors gear up for the White House to potentially unleash a record amount of crude from US reserves in a bid to ease pressure at the pump following Russia’s invasion of Ukraine.

What’s happening: President Joe Biden is weighing a plan to release around 1 million barrels per day for a number of months. The announcement could come as soon as Thursday, according to a person familiar with the deliberations.

Brent crude futures, the global benchmark, dipped 6% in early trading, falling below $107 per barrel. US oil was last trading near $102 per barrel.

Prices have also dropped recently due to expectations for lower demand from China, a top importer, as the country rolls out new restrictions in major cities like Shanghai to fight the spread of Covid-19.

After jumping above $139 per barrel in early March, Brent futures have pulled back sharply. They’re now more than 20% below that level.

Additional supply and reduced demand should be a recipe for prices to keep declining in the near term. But there’s skepticism that tapping strategic reserves will change the underlying market dynamics over a longer period.

“Conceptually, such a release would help the oil market,” Damien Courvalin, a Goldman Sachs strategist, told clients Thursday. “This would remain, however, a release of oil inventories, not a persistent source of supply for coming years.”

Media reports indicate the United States could ultimately release 180 million barrels of oil from reserves stored in underground salt caverns in Louisiana and Texas. That would be more than three times the size of the release that the Biden administration announced in November. Another release was coordinated with allies earlier this month.

But even that would not be sufficient to make up for the loss of Russian crude, as many traders steer clear of sanctions and the logistics of picking up cargoes near a war zone. According to the International Energy Agency, Russian output could drop by 3 million barrels per day in April.

That means additional supply from the United States would only replace a third of the lost production from Russia.

The Organization of the Petroleum Exporting Countries, or OPEC, still looks unlikely to come to the rescue. The group, which meets Thursday with allied producers including Russia, is not expected to ramp up supply beyond its existing plans, even though Saudi Arabia and the United Arab Emirates could theoretically do so.

It’s complicated: Russian crude has not disappeared from the market entirely. Bloomberg reports that Russia is offering to directly sell crude to India at a steep discount. And my CNN Business colleague Matt Egan reports that Russian energy is still drawing interest from potential buyers in the shadows as tankers turn off their trackers to avoid detection.

But analysts are skeptical that more entrenched factors driving up oil prices are likely to ease. That will continue to push prices higher in the long run.

“The US potentially releasing one million barrels of oil per day is unlikely to make up for the lost Russian supply, and should fail to drive prices sustainably lower,” ING strategists said Thursday.

Signs of a housing bubble

As US home prices soar to new heights and keep on climbing, some researchers and economists say they see signs of a housing bubble taking shape, my CNN Business colleague Anna Bahney reports.

Home prices are rising faster than they should and are becoming “unhinged from fundamentals,” according to a new blog post written by researchers and economists at the Federal Reserve Bank of Dallas.

Until recently, concerns about a bubble didn’t have widespread support. But the Fed researchers said new evidence is emerging after they examined housing markets across the country.

“Our evidence points to abnormal US housing market behavior for the first time since the boom of the early 2000s,” the researchers wrote. “Reasons for concern are clear in certain economic indicators.”

Many Americans are still scarred by the last housing crash in 2007, which was fueled by cheap credit and lax lending standards, which led millions of homeowners to owe more on their homes than they were actually worth.

This time, the economists said they are worried about a different scenario.

They called out “exuberance” and a fear of missing out as home prices keep climbing, fed by short supply, investor interest and pandemic savings. As more buyers pile in, this can create a self-fulfilling prophecy in which price growth can become exponential, they said.

What happens next? The researchers recommended policymakers and market participants closely watch local markets for booms in prices in order to better respond “before misalignments become so severe that subsequent corrections produce economic upheaval.”

This billionaire investor is ditching the drama

Billionaire investor Bill Ackman made his name as an activist who waged aggressive campaigns for change at companies like J.C. Penney (JCP) and Procter & Gamble (PG). Now, he says he’s opting for a lighter touch.

Big pivot: In a letter to investors this week, Ackman said that his firm Pershing Square Capital Management has “permanently retired” from activist short selling, which he branded the “‘noisiest’ form of activism.”

“All of our interactions with companies over the last five years have been cordial, constructive and productive,” Ackman said. “We intend to keep it that way as it makes our job easier and more fun, and our quality of life better.”

Short selling — or placing bets that stocks will fall — has always been a divisive tactic on Wall Street. Last year, it generated a fresh wave of backlash as an army of traders coordinating on social media sent GameStop shares soaring and slammed hedge funds with big short positions. Regulators have been giving the practice renewed scrutiny.

What does Ackman’s “quieter approach” look like? Pershing Square has been taking stakes in companies that it thinks will do well, like home improvement hub Lowe’s (LOW) and restaurant chain Chipotle (CMG).

The decision to play nice is a notable shift from the man who made waves with his public campaign against nutritional supplement company Herbalife. That effort sparked a dramatic television confrontation with rival Carl Icahn in 2013. Icahn, who backed Herbalife, told Ackman: “I wouldn’t invest with you if you were the last man on Earth!”

Up next

Walgreens (WBA) reports results before US markets open. BlackBerry (BB) follows after the close.

Also today: The Federal Reserve’s preferred measure of US inflation, the Personal Consumption Expenditures Price Index, posts at 8:30 a.m. ET.

Coming tomorrow: How many jobs did the US economy add in March? Economists surveyed by Refinitiv estimate 490,000.