Oil prices dropped by more than 1% on Tuesday as the U.S. crude reserves depressurize the oil market, Although resurgent COVID-19 cases in Europe still affects demand.
Furthermore, The U.S. plan to release emergency oil reserves with China, India, and Japan to lower energy prices still remains a major task for the Biden’s administration.
Brent Crude futures fell 0.87%, to $79.01 a barrel by 09:38 GMT and U.S. West Texas Intermediate (WTI) crude futures declined by 1.28% to $75.77.
The OPEC+ alliance between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia has repeatedly rejected urges from the White House to increase supply of oil. On Monday, prices rose more than 1% on reports that the group could adjust planned increases to output if large consuming countries release crude from reserves or if the pandemic dampens demand.
Oil Prices have dropped below $80 a barrel from a three-year high of more than $86 on Oct. 25 amid talks of a coordinated release and potential hit to energy demand from a fourth wave of COVID-19 cases in Europe.
However, a market analyst have explained reserve release will only be temporary. Rystad Energy analyst Louise Dickson stated “As Europe, and in particular Eastern Europe, struggles to halt the spread of COVID-19, the risk of lockdown-like measures looms large,”
She said demand in November for road and jet fuel in Europe is expected to fall to 7.8 million barrels per day (bpd) from 8.1 million bpd in October, though part of that is a normal decline for this time of year.