On Monday, crude oil prices slumped to the lowest level in seven weeks, continuing the previous session’s slip on the back of the concerns regarding additional supply from Japan and the worsening coronavirus situation in Europe.
As of 02.06 GMT, Brent plunged by 0.72% or 57 cents to USD78.32/barrel while US WTI futures fell by 0.51% or 39 cents at USD75.55/barrel. Both benchmarks hit their lowest level since October 1, earlier in the session.
Previously on Friday, they lost around 3%.
The market is anxiously waiting for Japan’s decision to release oil from its emergency inventory to help balance the surging oil prices under a request from the US. On Saturday, Japan PM Fumio Kishida expressed his will to comply with the request. However, the Japanese laws only allow reserves to be tapped if there are supply constraints or natural disasters.
"We are proceeding with consideration as to what we can do legally on the premise that Japan will coordinate with the US and other countries concerned," Kishida said.
Regarding demand, concerns arise that the renewed coronavirus in some regions of Europe curb could diminish the good development.
ANZ noted that Austria imposed a lockdown earlier this month, while Germany is poised to agree on mandatory remote working. The working from home program is now being advised in Ireland and the Netherlands.
On Friday, the US Commodity Futures Trading Commission said that money managers cut their net long US crude futures and options positions in the week to November 16.
On the other hand, investors are also monitoring the middle eastern geopolitical situation. On Monday, Saudi Arabian state media informed that Saudi-led coalition fighting the Iran-backed Houthi movement in Yemen said it detected indications of imminent danger to navigation and global trade south of the Red Sea.
