LONDON. Oil prices rose on Monday but remained under pressure from rising COVID-19 cases in Europe, prompting fears of both oversupply and weak demand.
Brent and US West Texas Intermediate (WTI) crude oil prices fell more than $ 1 in early trading, hitting their lowest level since October 1.
By 1007 GMT, Brent was up 31 cents, or 0.4 percent, to $ 79.20 a barrel, while US crude was up 34 cents, or 0.5 percent, to $ 76.28. …
The prospect of national restrictions in Europe has raised concerns about economic growth and oil demand, said Tamas Varga, an oil analyst at London-based brokerage PVM Oil Associates.
Investors sought refuge such as the dollar early in the session, which contributed to the sharp drop in oil prices, Varga added.
Tens of thousands of people protested in Vienna on Saturday after the Austrian government announced new isolation. Germany may also impose new restrictions as politicians discuss isolation for the unvaccinated.
The US dollar traded close to a 16-month high against the euro on Monday, making dollar-denominated oil more expensive for buyers with other currencies.
Meanwhile, the prospect of a Strategic Oil Reserves (SPR) release supported oil price pressures and kept Brent at the $ 80 psychologically important level.
Japanese Prime Minister Fumio Kishida made it clear on Saturday that he is ready to help fight the sharp rise in oil prices after the United States requested to free oil from its emergency reserves.
“Gas prices are almost $ 4 a gallon, and that’s when politicians in the US get very nervous,” said Fereidun Fesharaki, chairman of Facts Global Energy, a consulting firm.
But any SPR release will only have a short-term impact for two or three weeks before things get back to normal, he added.
The combined SPR output could be anywhere from 100 to 120 million barrels or more, Citi analysts noted in a November 19 note. This includes 45 to 60 million barrels from the US, about 30 million barrels from China, 5 million barrels. from India and 10 million barrels each from Japan and South Korea, according to the bank.
Author: Bozorgmehr Sharafedin