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Oil falls on expected deal to tap emergency crude reserves -Breaking

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© Reuters. FILE PHOTO Aerial view of an Idemitsu Kosan Co. oil plant in Ichihara east of Tokyo. This photo was taken by Kyodo. Kyodo/via REUTERS Mandatory credit Kyodo

Sonali Paul

MELBOURNE (Reuters – Oil prices plunged on Tuesday after falling on the back of gains made in the previous session. This was due to growing optimism that India, the United States, Japan, and Japan would release oil reserves to manage prices despite continuing concerns about European demand for crude as COVID-19 claims rise in Europe.

A source close to the situation stated that the U.S. Department of Energy would announce Tuesday an oil loan from the Strategic Petroleum Reserve. The coordination will take place with other countries.

U.S. West Texas Intermediate crude futures dropped 43 cents or 0.6% to $76.32 per barrel at 0128 GMT

Futures declined 30 cents (or 0.4%) to $79.40/barrel

WTI and Brent both rose 1% over Monday, aided by reports that OPEC+ (Russia, Organization of the Petroleum Exporting Countries) could modify their plan for raising oil production if Russia, Russia and their allies release more crude oil from their reserves.

Analysts are now focusing their attention on the possible impact of fourth-wave COVID-19 in Europe cases, which could lead to a coordinated crude oil release that has driven prices down below $80 per barrel.

Louise Dickson from Rystad Energy said that as Europe and particularly Eastern Europe struggle to stop the spread COVID-19 the danger of lockdown-like actions looms large.

According to her, November demand for European road and jet fuel will fall to 7.8million barrels per hour (bpd), from October’s 8.1 million. However, this is part of a typical decline at this time of the year.

Dickson stated in an email comment that “if a new wave is enacted Europe-wide, oil prices won’t be spared throughout the remaining flu season in North Hemisphere.”

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