Global crude oil price fell below the $80 a barrel amid fear spooking investors of a new Covid 19 variant. S&P Global in its report said that oil prices were falling in line with the broader financial markets as investors exited riskier assets following reports of the new virus variant.
It added that Investors were also awaiting the next OPEC (Organisation of the Petroleum Exporting Countries) + meeting slated on December 2 “to see whether the group will hold off on its monthly output increase in light of the recent surge in Covid-19 infections and strategic petroleum reserve releases by major oil importing nations.”
Besides, the US has announced releasing 50 million barrels of oil from its strategic reserves to cool down rising prices and ease inflation. Other economies including India, China, Japan and South Korea have also decided to release oil from their reserves. India will release 5 million barrels.
Global brent oil prices have been steadily rising since September. However, after the US decided to release oil from its strategic reserves, prices have started to ease.
According to a statement released by the White House, American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic.
“The above-mentioned countries' move was largely seen as a message to major producers to enhance production in order to address worries about rising fuel prices affecting powerful economies,” CapitalVia Global Research Limited said.