Oil drops on expectation of reaching emergency crude oil reserves Reuters

© Reuters. File photo: This photo was taken by Kyodo News. A bird’s eye view shows an oil plant of Idemitsu Kosan in Hara-shi, eastern Tokyo, Japan on November 12, 2021.Mandatory Credit Union/via Reuters

Sonali Paul

Melbourne (Reuters)-Oil prices fell on Tuesday, reversing the gains of the previous trading day as more and more people talk about the United States, Japan and India will release crude oil reserves to curb prices, despite the fact that as COVID-19 cases There is an outbreak in Europe and demand is threatened.

A source in the Biden administration who is familiar with the situation said that the US Department of Energy is expected to announce a loan from the Strategic Petroleum Reserve on Tuesday and will coordinate with other countries.

At 0128 GMT, US West Texas Intermediate (WTI) crude oil futures fell 43 cents, or 0.6%, to US$76.32 per barrel.

Futures fell 30 cents, or 0.4%, to $79.40 per barrel.

Brent crude oil and WTI both rose 1% on Monday due to reports that if large consumer countries release crude oil from their reserves or if the pandemic suppresses demand.

Since the coordinated crude oil release has successfully pushed the price below US$80 per barrel, and the actual release is expected to have only a temporary impact, analysts are turning their attention to the potential blow to demand from the fourth wave of COVID-19 cases. Europe.

Rystad Energy analyst Louise Dickson said: “As Europe, especially Eastern Europe, strives to prevent the spread of COVID-19, the risks of similar lockdown measures are imminent.”

She said that European demand for road and aviation fuel in November is expected to fall from 8.1 million barrels per day in October to 7.8 million barrels per day, although part of it is a normal decline at this time of the year.

Dixon said in an email comment: “If Europe implements a new wave of blockades, oil prices will not be spared for the remainder of the flu season in the northern hemisphere.”

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