Brent futures for May fell $5.47, or 4.8%, to $107.98 a barrel at 0608 GMT. The May contract expires on Thursday and the most actively traded June futures were down $5.26 to $106.18.
U.S. West Texas Intermediate futures for May delivery fell $6.23, or 5.8%, to $101.59 a barrel after earlier slipping to a low of $100.85.
U.S. President Joe Biden will give remarks later on Thursday regarding his administration's actions aimed at lowering gasoline prices that have risen to records.
"If it turns out to be as much as that, it would be significant and so would certainly help to a certain extent to fill the shortfall, but not all of it," said Warren Patterson, head of commodities strategy at ING, referring to the 180 million barrels figure.
"Another key question is whether this volume would be part of a wider coordinated release."
International Energy Agency (IEA) member countries are set to meet on Friday at 1200 GMT to decide on a collective oil release, a spokesperson for New Zealand's energy minister said on Thursday.
News of the potential U.S. oil release overshadowed a meeting set for later on Thursday between the Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia. The group known as OPEC+ is expected to stick to its deal to gradually increase oil production.
The U.S. oil release may be effective in reducing wild volatility and curtail sharp uptrend movements, but with OPEC+ still unwilling to uphold production, prices need a long-term solution, said Avtar Sandu, a commodities manager from Phillip Futures.
In early March, the Biden administration said it would sell 30 million barrels from the strategic reserves as part of a global release of 60 million barrels to lower prices.
In November, the United States announced a plan to release 50 million barrels from the SPR, mostly through exchanges where the buyer agrees to replace the oil later.
"I guess we need to also see if this would be a straightforward release or an exchange," ING's Patterson said.
The release comes as U.S. commercial oil inventories fell by 3.4 million barrels in the week to March 25, surpassing forecasts of a 1 million barrel drop. At the same time, implied demand for gasoline and distillates declined.
The slower demand came as U.S. production rose by 100,000 barrels per day (bpd) to 11.7 million bpd after stagnating at 11.6 million bpd since early February.
