Biden’s Bluff And Covid Cases Drag Oil Prices Down

Biden’s Bluff And Covid Cases Drag Oil Prices Down

Oil prices have continued to fall this week as rumors of President Biden tapping into U.S. oil reserves combined with a resurgence in covid cases in Europe created fresh bearish sentiment.

Resurgent COVID fears triggered by a fresh surge in European cases weighed on oil prices this week, dragging the Brent benchmark towards $78 per barrel, down almost $3 per barrel on Friday alone. With both Brent and WTI set for a fourth weekly decline, it seems that the Biden Administration’s plan to bring outright prices lower has largely worked. There has so far been no joint action from the world’s largest crude importers; the US, China, and India included, but the threat of them combining forces was strong enough to set a bearish tone to trading over the past days. Downside risks in demand and potential SPR releases have also contributed to a flattening of steep backwardation curves, with 12-month spreads in both Brent and WTI trading at their widest since 2013.