Both West Texas Intermediate and Brent crude are now on a four-week losing streak after posting noticeable price declines.
WTI prices for December delivery fell by 3.6 percent, or $2.91, to $76.10 per barrel. Brent prices fell below $80 after declining by 2.9 percent, or $2.35, to $78.89 per barrel.
The price declines were part of a wider selloff in the US, as the New York Stock Exchange lost more than 268 points, or 0.75 percent.
The increasing number of COVID-19 cases in Europe, which could stall the economic recovery of the region, appears to have weighed on investor optimism. Austria has imposed a full lockdown as Covid cases in that country have spiked, and there is concern Germany may follow suit.
“The (oil) market still 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.
The prospect of several major industrial nations opening up their oil reserves in an effort to reduce prices is also being cited as a region for the drop in prices.
The Biden administration has openly discussed the prospect of selling oil from the Strategic Petroleum Reserve, and China and South Korea may also follow suit.
The threat of a US release of oil from its reserves are being credited with pushing prices down approximately $4 per barrel, but Goldman Sachs said any release “would only provide a short-term fix to a structural deficit.”
“The fear of the unknown is weighing on market sentiment,” said Phil Flynn, senior analyst at Price Futures in Chicago.
“The worry is that we will get some sort of coordinated release during the Thanksgiving holiday next week, when volumes are typically low and dramatic moves have occurred.”
Louise Dickson, Rystad Energy’s senior oil market analyst, noted that the market’s strong reaction to Covid-19’s comeback in Europe may show the interventions by US and China to be pre-mature, proving that other demand-side risks are materializing and putting a lid on rising oil prices.
“Opec+ may not have been wrong to stick to its modest plan after all,” she said. “But it was all a guessing game and governments had to act.”
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