On Friday, both US and UK crude oil futures’ prices had tumbled below an $80/barrel-mark for the first time since late-September, as soaring pandemic cases in Central Europe had taken a grievous toll on investors’ morale.
If truth is to be spoken, a pandemic resurgence in Central Europe with possibilities of further restrictions over coming weeks apart from an entire lockdown in Austria starting from next week alongside a likely similar approach from Germany, the bloc’s largest economy, had been menacing a maverick rebound in economic activity in the 26-member eurozone, while a number of G20 economy’s decision to release reserve crudes in order to rebalance a roaring global crude oil market, had weighed on market participants’ sentiment.
On top of that, factory activity in China, which has been weathering its worst pandemic outbreak since Wuhan Covid-19 situation back in the early-2020s, had shrunk by a sizable margin over recent weeks, while Japan’s factory activity toppled to an eight-year low amid low-export volumes of autos, eventually flaring up a horrendous commodity market landscape.
Aside from than, an OPEC+ decision to cling on to a low-output policy that coldshouldered calls from the US President Joe Biden to increase production, which had been submissively pushing oil prices higher, seemingly had botched to cope up with the latest leg of pandemic resurgence in Central Europe.
Crude oil prices fall below $80 a barrel
Citing statistics, in the day’s commodity market wind-down, UK crude futures scheduled to be expired by January, dipped 2.8 per cent to $79.00 a barrel, while US West Texas Intermediate (WTI) crude oil futures for December delivery soured as much as 3.2 per cent to $76.47 per barrel.
Meanwhile, addressing to plausible restrictions in eurozone, a market analyst at OANDA, Craig Erlam wrote in a client note, “The (oil) market still remains fundamentally in a good position but lockdowns are now an obvious risk... if other countries follow Austria's lead. ”