Oil prices recovered from the lowest levels they witnessed in 7 weeks, but remained under pressure after Japan said that it was considering releasing its reserve stock of oil, in addition to the current state of Europe in light of the return of the epidemic, which raised fears between excess supply and a severe shortage of oil.
Brent crude lost about 26 cents, or 0.3% of its value, to record $78.63 per barrel, while West Texas Intermediate (WTI) oil futures fell by about 12 cents, or 0.2%, to $75.82 per barrel, and the markets remain in flux as the SPR offering has yet to be priced.
At the beginning of the market opening, Brent and WTI oil prices reached their lowest levels since the first of October, but after a few days since that time the oil price rebounded, to read more [OPEC Meets to Raise Output as Oil Prices Rally], and prices fell by about 3% last Friday to record the fourth consecutive week of decline for the first time since March 2020.
On Saturday, Japanese Prime Minister Fumio Kishida indicated that he is ready to face rising oil prices after a request from the United States to release oil from Japan’s reserves in an unprecedented move.
The White House on Friday pressed the OPEC group again to maintain a global supply volume appropriate to market conditions after days of US discussions with some of the world’s largest economies over the possibility of releasing oil from strategic buffers to calm rising energy prices, and it is reported that the total volume of the SPR will be in the range of 100-120 million barrels, and it may be higher.
The possibility of re-imposing a quarantine in Europe with the increase in the number of virus infections may contribute to further pressure on prices, as Germany warned that it may need to move to imposing a complete quarantine after Austria said that it would re-apply the epidemiological restrictions to confront the increasing infections and the spread of infection, which raised some concerns on the continent, but the financial markets have not witnessed noticeable negative effects so far. Read more [European Markets Start The Week Higher Despite Pandemic Fear].