The price of oil increased on Monday the 22nd of November 2021, The price hike can be attributed to goading rise in the amount of COVID-19 cases intertwined with rise in oil reserve from japan. This has intensified market speculation, with investors expecting excess supply and weak demand.
The U.S. West Texas Intermediate (WTI), one of the main global benchmark for oil production and prices dropped more than $1, the lowest it has been since the beginning of October. Data monitored suggests that By 10:07 GMT, Brent was up by 0.4% to $79.20 a barrel while United States crude gained 0.5%, to $76.28.
Tamas Varga, an oil analyst for London brokerage PVM oil associates, explained that the impending lockdown arising from the increase in Covid-19 cases has created uncertainties around oil demand and economic recovery. Tamas further disclosed that as the dollar traded earlier in the session, This activity instigated a drop in oil prices.
Protest erupted in countries like Austria and Netherlands, with supporters infuriated by the new lockdown rules implemented their various governments. Reports from Germany proposes that new movement restrictions may be implemented for unvaccinated citizens.
As the U.S. dollar continues to trade higher against the Euro, dollar-priced crude more expensive for buyers with other currencies.
Simultaneously, the expectation of the distribution of oil from strategic petroleum reserves (SPR) maintained the price pressure on oil leaving Brent Crude at the $80 spot.
Fumio Kishida, the prime minister of Japan, stated that he is ready to help with efforts to curb rising oil prices after a request from the United States to release oil from its emergency stockpile.
Strategic Petroleum Reserve (SPR), the world’s largest supply of emergency crude oil, could release 100 million to 120 million barrels or even higher, Citi analysts said in a note dated Nov. 19. This includes 45 million to 60 million barrels from the United States, about 30 million barrels from China, 5 million barrels from India and 10 million barrels each from Japan and South Korea, the bank estimated.
Oil investors are also monitoring market activities in Saudi Arabia after reports disclosed that the Saudi-led coalition fighting the Houthi movement in Yemen warned of an imminent danger to navigation and global trade south of the Red Sea.