Oil price is falling due to a new strain of Corona - Economist

Oil prices have continued to decline since the beginning of the threat that the United States, Japan, China, and others will start drawing from reserves and stocks until the supply of oil increases and prices fall.

The oil price fell by more than 2% during trading on Friday, November 26, due to fears of an increase in global oversupply in the first quarter of next year, and a new strain of the Coronavirus appeared in several countries that worried investors.

Brent crude futures fell by $1.69, or 2.6 percent, to $77.53 a barrel, and US West Texas Intermediate crude fell $2.04, or 2.6 percent, to $76.35 a barrel.

On Tuesday, the administration of US President Joe Biden announced plans to release millions of barrels of oil from strategic reserves in coordination with other major consumer countries such as China, India, and Japan in an attempt to cool prices.

A source in the Organization of the Petroleum Exporting Countries (OPEC) said that such a release would likely lead to an increase in supplies in the coming months, according to the findings of a panel of experts advising ministers in OPEC countries.

The source said that the Council of the OPEC Economic Committee expects a surplus of 400,000 barrels per day in December, increasing to 2.3 million barrels per day in January and 3.7 million in February if consuming countries go ahead with withdrawals.