Oil Prices Decline as Pressures Mount on Demand

Oil Prices Decline as Pressures Mount on Demand

Oil prices decline on Monday as pressures mount on demand amidst rising COVID-19 infections in Europe, mounting pressures on China, Japan, South Korea and others to release crude from strategic reserves.

Due to a weaker demand outlook, crude prices fell, with front-month global benchmarks Brent crude down 0.39% and US West Texas Intermediate crude down 0.2%.

International benchmark Brent crude was trading at $78.58 per barrel, down 0.39% after closing the previous session at $78.89 a barrel. American benchmark West Texas Intermediate was at $75.79 per barrel after it dropped off 0.19% from $75.94 a barrel.

Following the United States call for strategic oil reserves release, Japan and China have signalled a potential release of their oil reserves. Meanwhile, sales of West African crude were slow on Monday as traders awaited the results of several tenders, Reuters said.

Around two cargoes of Angolan and Congolese crude for loading in December remain unsold today. Nigerian sales were also stalled amid several buy tenders, with December OSPs still yet to be announced though loading programmes for January began to emerge.

Nigeria’s Qua Iboe stream is set to load 153,000 barrels per day (bpd) in January, according to preliminary export plans seen by traders.

Oil prices declined to a seven-week low after Japan said it is considering the release of oil from its emergency reserves to curb surging oil prices, and from concerns that tightening pandemic measures in European countries will dampen demand.

Japan announced on Saturday the option it may take up of releasing oil from its Strategic Petroleum Reserves (SPR) to help temper soaring oil prices over an unprecedented request from US President Joe Biden last week.

Prices also came under demand pressure after some European countries began tightening COVID-19 measures to contain the surge in infection rates, after Austria opted to implement lockdowns, and Germany, Ireland and the Netherlands imposed restrictions on the unvaccinated.

As of Monday, Austria will impose a national lockdown. Chancellor Alexander Schallenberg said Friday that the lockdown would last for a maximum of 20 days.

The country will also impose a curfew on those who are not fully vaccinated. Germany announced new coronavirus measures, including tougher restrictions for those who are unvaccinated amid record-high cases.

In Belgium, the government said most people will have to work from home four days a week until mid-December. The Netherlands will go into a three-week partial lockdown, which sparked violent protests around the country. # Oil Prices Decline as Pressures Mount on Demand

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