The global oil prices declined to $77 per barrel, the lowest price fall of the commodity since September 2021. The fall in price coincides with a new coronavirus variant and U.S. release of millions of barrels of oil from strategic reserves.
The global benchmark, Brent crude oil futures, slumped by 5.63 percent on Friday to $77.59 a barrel.
Also, the U. S West Texas Intermediate (WTI) crude oil futures dipped by 6.52 percent to $73.28 at 12.06 pm.
According to a PVM analyst, Tamas Varga, he told Reuters that the unforeseen outbreak of the new variant coupled with the OPEC’s price gauge could impact fuel demand and cut economic growth.
“OPEC’s initial assessment of the coordinated (stockpile) release and the sudden appearance of a new variant of the coronavirus raises serious concerns about economic growth and the oil balance in coming months,” Varga said.
Reuters stated that investors were also watching the reaction of China to the U.S. release of millions of barrels of oil from strategic reserves in partnership with other large consuming nations, a part of its efforts to cool prices.
According to an OPEC source who spoke to Reuters, the release could raise supplies in coming months, based on findings of a panel of experts that advises ministers of OPEC countries.
Also, the OPEC source disclosed to Reuters that the Economic Commission Board anticipates an excess of 400,000 barrels per day (bpd) in December, which is expected to rise to 2.3 million bpd in January and 3.7 million bpd in February if consumer nations proceeded with the releases.
