A barrel of West Texas Intermediate crude oil in January deliveries on the NYMEX fuel exchange in New York costs $ 75.73, down 0.28 percent after a drop of almost 6 percent last week.
Brent on ICE in London for January deliveries is priced at $ 78.54. per barrel, down 0.44 percent.
There are signs in the markets that the US, China and Japan are preparing to use domestic oil reserves amid concerns about accelerating inflation.
President Joe Biden has been talking for several weeks about a possible release of oil from the SPR (Strategic Petroleum Reserve).
In turn, Japanese TV station Asahi said on Monday – citing information from an anonymous government official – that the authorities in Tokyo are preparing to use domestic oil supplies as part of a joint effort with the US to reduce high fuel prices.
The Japanese government has determined that it can legally use oil from Japan’s raw material reserves, which at the end of September had 45.45 million kilograms of oil, or 290 million barrels.
Earlier, Japanese Prime Minister Fumio Kishida informed that his government was considering using oil from reserves in cooperation with other countries.
Japan recently performed a significant oil release from its reserves in 2011 when it released 7.9 million barrels of petroleum products, mainly for the domestic market.
Last week, China also signaled that it was working to release oil from its strategic reserves.
This preparation for oil from domestic reserves is taking place as the US and other major oil consumers grapple with rising oil prices as the OPEC + countries resist supplying the markets with more oil.
At the end of October, the price of crude oil in the US exceeded the $ 85 mark. a barrel, the highest in seven years.
“The US has been talking about SWP oil for a few weeks, but so far hasn’t done anything,” said Vandana Hari, co-founder of consulting firm Vanda Insights.
“The fact that the Americans did not do it during many years of oil price peaks may be a sign that they are unlikely to do it,” he says.
Meanwhile, the revival of COVID-19 in Europe and the imposition of restrictions by countries may be a challenge for oil markets.
Austrian Chancellor Alexander Schallenberg announced on Friday that a nationwide lockdown will begin on Monday, which will last at least until December 12 and may be extended. In addition, it was announced that vaccination against COVID-19 will be mandatory from February 2022.
The difficult situation related to the new wave of the coronavirus epidemic is also felt by Germany and other countries in Europe.
“Oil prices are falling due to the epidemic in Europe, which means that the pressure in the markets is weakening,” Hari points out.