Oil prices dropped below USD 80 a barrel on Friday as a fresh surge in COVID-19 cases in Europe threatened to slow the economic recovery while investors also weighed a potential release of crude reserves by major economies to cool energy prices.
Brent crude was down USD 1.54, or 1.9 percent, at USD 79.70 a barrel by 1023 GMT after earlier rising to as high as USD 82.24, extending volatility seen on Thursday.
US West Texas Intermediate (WTI) crude for December delivery was down USD 1.38, or 1.75 percent, at USD 77.63 a barrel, having swung through a range of more than USD 2 the previous session before closing higher as well.
The WTI December contract expires on Friday and most trading activity has shifted to the January future, which was down 1.8 percent at USD 77 a barrel.
Both Brent and WTI are set for a fourth week of declines.
Austria became the first country in Western Europe to reimpose a full coronavirus lockdown this autumn to tackle a new wave of COVID-19 infections across the region that threatened to slow the recent months' economic recovery.
Brent has surged almost 60percent this year as economies bounce back from the pandemic and the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, has only raised output gradually.
Governments from some of the world's biggest economies were looking into releasing oil from their strategic petroleum reserves (SPR) following a request from the United States, first reported by Reuters, for a coordinated move to cool prices.
Speculation about a US stock release has already pushed oil prices down by about USD 4 a barrel in recent weeks and additional supplies of up to 100 million barrels are already priced in, Goldman Sachs oil analysts said in a note.
As a result, it said any release "would only provide a short-term fix to a structural deficit".
OPEC has maintained what analysts say is unprecedented restraint on production, even as prices have rebounded from the depths of the early stages of the pandemic.
First Published: IST