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LONDON, Nov. 19 (Reuters) – Oil prices fell below $ 80 a barrel on Friday as a further rise in COVID-19 cases in Europe threatened to slow the economic recovery as investors also weighed on a potential release of crude reserves by major economies to cool prices.
Brent crude was down $ 1.90, or 2.34%, to $ 79.34 a barrel at 1443 GMT. It had previously fallen to $ 78.15, its lowest since early October, after hitting $ 82.24, extending the volatility seen on Thursday.
U.S. West Texas Intermediate (WTI) crude for December delivery fell $ 1.97, or 2.5%, to $ 77.04 a barrel.
The December WTI contract expires on Friday and most trading activity has moved to the January futures, which was down 2.4% to $ 76.52 per barrel.
Both Brent and WTI are set for a fourth week of decline.
Austria became the first country in Western Europe to re-impose a full coronavirus lockdown this fall to tackle a new wave of COVID-19 infections in the region that threatens to slow the economic recovery of recent months. Read more
Germany, Europe’s largest economy, has warned it may also have to move to a full COVID-19 lockdown. Read more
Brent has jumped nearly 60% this year as economies recover from the pandemic and the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, have risen their production only gradually.
“The (oil) market remains fundamentally in a good position, but lockdowns are now an obvious risk … if other countries follow Austria’s lead,” Craig Erlam, market analyst at OANDA, said in a statement. note.
Governments in some of the world’s largest economies were considering releasing oil from their Strategic Petroleum Reserves (SPRs) following a U.S. demand, first reported by Reuters, for coordinated action to cool the costs. Read more
Speculation of an outflow in the United States has already lowered oil prices by around $ 4 a barrel in recent weeks and additional supplies of up to 100 million barrels are already expected, oil analysts said. from Goldman Sachs in a note.
As a result, he said any release “would only provide a short-term solution to a structural deficit.”
OPEC + has stuck to its policy of gradually increasing oil production even as prices have risen, saying it expects supply to exceed demand in the first months of 2022.
Additional reporting by Aaron Sheldrick; Editing by David Evans and Nick Zieminski
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