Petroleum prices dropped to six weeks low Friday due to new Covid lockdowns that sparked concern about demand, just as the industry actors signaled a rebound of supply.

West Texas Intermediate crude futuresThe December delivery contract fell more than 4 percent to $75.37 per barrel, the lowest price since Oct. 7. Today is the expiration of that contract. The more active contract for January delivery fell 3.8% to $75.44/barrel.

Brent crude futuresThe benchmark international currency traded for $78.15 at the lowest level since Oct. 1.

Brent and WTI both are in the midst of their fourth week of losses. It is the longest weekly losing streak dating back to March 2020.

WTI opened in the green but fell to the negative following the announcement of Austria’s lockdowns. Any indications that the market might see a thaw in demand will be alarming to those who have been key drivers of this year’s oil recovery.

Craig Erlam (Oanda senior market analyst) said, “The market is still in a fundamentally good position. However lockdowns could be a real risk to this if others follow Austria’s lead.” A move below $80 may deepen the correction, possibly pulling the price towards the mid-60s,” Erlam said.

Although Friday’s drop in oil prices was the biggest since July, it has been trending down over the past few weeks. Biden administration repeatedly stated that it is exploring options to reduce the pressure on consumers by raising gas prices. These are at an all-time high of seven years. The administration could tap into the Strategic Petroleum Reserve.

Louise Dickson (senior oil market analyst at Rystad) stated, “If the US Presidential Administration wants the oil price’s attention it now has it.” Since the summer, the US and other importing nations like China, India and Japan have been openly probing the oil markets, OPEC+ especially, in order to reduce supply and offer price relief. [are]”Sing along with the chorus.”

However, experts have indicated that oil released from the SPR won’t likely have any long-term effects.

UBS stated in Nov. 5, that while such a move would cause price declines, the SPR could only bridge the gap during production interruptions and not address structural problems of underinvestment or rising demand.

Along with political headwinds oil also faces pressure because of an uptick supply. This is due to producers, even those in the U.S.A., bringing their production online.

The price of oil has steadily increased throughout 2021, with WTI reaching a 7-year high at $85.41 Oct. 25, 2018. The price has dropped 11.5% in the past seven years. Even with the weakness in recent weeks, U.S. Oil is up 55% for 2020.