Oil Price: relasing SPRs amidst waves of Covid-19 surges in Europe

 

Covid-19 cases in Europe and oil price

The price of crude oil that has been falling during the past three weeks recovered slightly on Monday when the markets opened for the business for the new week.

As of 11:45 GMT, the WTI and Brent were back in the green, both standing at $76.08 and $79.00 respectively, recording modest gains. The prices have since fallen once again – slightly.

Throughout last week, crude oil markets were bracing themselves for an increased output from strategic petroleum reserves of the major global consumers, including the US.

Although officially being mute, the US, China and Japan have been contemplating the move to bring down the prices at the pumps in order to keep the corresponding economies on track to a fragile recovery in the aftermath of a once-in-a-century epidemic.

The very urgency has forced the leaders of the major economic powers to temporary abandon the lingering disagreements over a range of issues to reach a common front in order to keep the rising energy costs at bay; the recent meeting between President Biden and President Xi Jinping is a case in point.

Despite the enthusiasm of the consumers, so far the desired effect has not reflected on the price of crude oil; the fall that we witnessed during the last week was pretty modest, compared with the seven-year-high that the price had risen to.

As the focus slowly shifts away from the strategic petroleum reserves, the crude oil markets have been forced to keep tabs on another development, especially in Europe: the Covid-19 flare-ups are accelerating at an alarming rate in many European nations, including Germany, Austria, the Netherlands and France.

The pandemic situation has been made worse by the riots against lockdowns in the region.

If the lockdowns are extended exactly the way they were done last year during the winter, the demand for crude oil is going to plummet and it echoes the forecast by the EIA, the US Energy Information Administration, last week.

The OPEC+ anticipates the same and justifies its stand on inflating the supply side in response to the outcries of the consumers.

As the inflation started biting in a measurable way, the Biden administration will not be able to rest on its laurels as far as its strategy on the energy prices is concerned.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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