Oil prices tumbled to below $80 a barrel amid renewed concerns about COVID-19 in Europe

Spark Global Limited reports:

Oil prices fell sharply to $78 a barrel on Friday as a new surge in COVID-19 cases in Europe threatened to slow the economic recovery, while investors weighed the possibility of major economies releasing crude reserves to cool prices.

Brent crude was down $2.78, or 3.42 per cent, at $78.46 a barrel at 1300 GMT, its lowest level since early October, after rising as high as $82.24, continuing Thursday’s volatility.
Us West Texas Intermediate for December delivery fell $2.61, or 3.3%, to $76.40 a barrel.
December West Texas Intermediate futures expire on Friday and most activity has shifted to January futures, which fell 3.3 per cent to $75.83 a barrel.
Brent and WTI are both headed for a fourth week of losses.
This fall, Austria became the first country in Western Europe to reimpose a total coronavirus lockdown in response to a new wave of COVID-19 infections in the region, which could slow the economic recovery in recent months.
Germany, Europe’s largest economy, warned it might also have to impose a total lockdown.
Brent has surged nearly 60 per cent this year as economies recover from the pandemic and the Organisation of the Petroleum Exporting Countries (OPEC) and its ally OPEC + increase production only gradually.

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“The [oil] market is still fundamentally in good shape, but a blockade is now a clear risk if other countries follow Austria’s lead,” Craig Erlam, market analyst at OANDA, said in a note.
The government is investigating some of the world’s largest economies from the strategic petroleum reserve release oil company (SPR) after a request from the United States, first reported by Reuters https://www.reuters.com/business/energy/exclusive — We ask — big — Country — coordination — Release of oil reserves — Resources — 2021-11-17 To cool prices with coordinated action.
Oil analysts at Goldman Sachs said in a report that speculation about a U.S. equity issue had pushed oil prices down by about $4 a barrel in recent weeks and had absorbed up to 100 million barrels of additional supply.
As a result, the Fed said any release “would provide only a short-term solution to the structural deficit”.

Opec + is sticking to its policy of gradually increasing oil production even as prices soar, saying it expects supply to outpace demand in the first few months of 2022.

 

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