Oil prices fell on Tuesday, reversing gains from the previous session, following growing talks the US, Japan and India will release crude reserves to keep prices under control despite the threat of a decline in the price. calls for COVID-19 cases to erupt in Europe.
The US Department of Energy is expected to announce a loan of oil from the Strategic Petroleum Reserve on Tuesday, and will be coordinated with other countries, a Biden administration source familiar with the matter said.
US West Texas Intermediate (WTI) crude futures fell 43 cents, or 0.6%, to $ 76.32 a barrel at 0128 GMT.
Brent crude futures fell 30 cents, or 0.4%, to $ 79.40 a barrel.
Brent and WTI both rose 1% on Monday following reports that the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, collectively referred to as OPEC +, may adjust their plan to raise oil prices. oil production if major consuming countries release crude from their reserves or if the pandemic dampens demand.
While there is talk of a coordinated release of crude that managed to bring prices below $ 80 a barrel and an actual release is only expected to have a temporary impact, analysts are turning their attention to the potential hit. of the demand for a fourth wave of COVID-19 cases in Europe.
“As Europe, and in particular Eastern Europe, struggles to stop the spread of COVID-19, the risk of containment-type measures is significant,” said Louise Dickson, analyst at Rystad Energy.
She said demand for jet fuel and jet fuel in Europe in November is expected to drop to 7.8 million barrels per day (bpd) from 8.1 million bpd in October, although this is partly a normal drop for this time of year.
“If a new wave of lockdowns are enacted in Europe, oil prices will not be spared for the remainder of the northern hemisphere flu season,” Dickson said in emailed comments.