The price of crude oil that has been falling during the past three weeks recovered slightly on Monday when the markets opened for the business for the new week.
As of 11:45 GMT, the WTI and Brent were back in the
green, both standing at $76.08 and $79.00 respectively, recording modest gains.
The prices have since fallen once again – slightly.
Throughout last week, crude oil markets were bracing
themselves for an increased output from strategic petroleum reserves of the
major global consumers, including the US.
Although officially being mute, the US, China and
Japan have been contemplating the move to bring down the prices at the pumps in
order to keep the corresponding economies on track to a fragile recovery in the
aftermath of a once-in-a-century epidemic.
The very urgency has forced the leaders of the major
economic powers to temporary abandon the lingering disagreements over a range
of issues to reach a common front in order to keep the rising energy costs at
bay; the recent meeting between President Biden and President Xi Jinping is a
case in point.
Despite the enthusiasm of the consumers, so far the
desired effect has not reflected on the price of crude oil; the fall that we
witnessed during the last week was pretty modest, compared with the seven-year-high
that the price had risen to.
As the focus slowly shifts away from the strategic
petroleum reserves, the crude oil markets have been forced to keep tabs on
another development, especially in Europe: the Covid-19 flare-ups are
accelerating at an alarming rate in many European nations, including Germany,
Austria, the Netherlands and France.
The pandemic situation has been made worse by the
riots against lockdowns in the region.
If the lockdowns are extended exactly the way they
were done last year during the winter, the demand for crude oil is going to plummet
and it echoes the forecast by the EIA, the US Energy Information
Administration, last week.
The OPEC+ anticipates the same and justifies its
stand on inflating the supply side in response to the outcries of the
consumers.
As the inflation started biting in a measurable way,
the Biden administration will not be able to rest on its laurels as far as its
strategy on the energy prices is concerned.
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