Global crude prices dropped to their lowest levels since October 1, as the latest surge in Covid cases in Europe and the US evoked new concerns over weakening demand.
Global benchmark Brent crude shed 0.72% to $78.32 per barrel as of 02:06 GMT, while US crude benchmark West Texas Intermediate (WTI) dropped 0.51% to $75.55 per barrel. WTI bounced back, trading above $76 per barrel at 07:39 GMT, while Brent recovered to over $79 per barrel.
Global crude futures were also impacted by Japan's reported decision to release the country's reserve stocks of oil - which is aimed at putting downward pressure on prices - a decision that inevitably boosted concerns about oversupply.
On Saturday, Japanese Prime Minister Fumio Kishida signaled that the nation is ready to help counter soaring oil prices, following a request by US President Joe Biden to release oil from its emergency stockpile.
"We're proceeding with consideration as to what we can do legally on the premise that Japan will coordinate with the US and other countries concerned," the Japanese prime minister said, adding that the country's regulations allow it to tap into its reserves only if there are supply constraints or natural disasters.
Meanwhile, surging Covid-19 Delta variant cases across major developed countries are projected to delay the highly anticipated growth in demand for fuel from cruise liners and airlines as the re-opening of international borders and travel becomes harder, even for the fully vaccinated.
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