19.11.202109:35:00UTC+00Oil Prices Tumble In Choppy Trade

Oil prices fell sharply on Friday amid talk of coordinated strategic reserve release and concerns that new COVID-related restrictions would hurt demand.

Benchmark Brent crude futures for January delivery fell $1.57, or 1.9 percent, to $79.67 a barrel while U.S. West Texas Intermediate (WTI) crude for December settlement were down $1.46, or 1.9 percent, at $76.95.

Investors continued to weigh the impact of potential releases of crude reserves by the world's two largest economies in a coordinated effort to cool energy prices and tame surging inflation.

OPEC + has been maintaining its restraint on production, even as prices have rebounded from the depths of the early stages of the coronavirus pandemic.

Even if the U.S. taps its Strategic Petroleum Reserve, Goldman Sachs analysts say such a move would be of only "modest and temporary help and could in fact backfire."

According to the U.S. Energy Information Administration's latest monthly Short-Term Energy Outlook (STEO) released on Thursday, crude oil prices are set to decline next year from the current levels as global inventories will start to build again with supply rising more than demand.

The Biden administration's push for a coordinated release of oil stockpiles follows a protracted dispute with OPEC and its allies (OPEC+).

Meanwhile, rising Covid-19 cases in Europe increased downside risks to demand recovery.

Austria has announced a full national lockdown from Monday amid a fourth wave sweeping the continent.

German Chancellor Angela Merkel on Thursday announced limits on public life for the unvaccinated, saying the move is necessary to tackle a "very worrying" fourth wave of the pandemic.