Oil down over demand fears after fresh COVID-19 restrictions in EU countries
Some EU countries including Belgium, the Netherlands, Germany and Austria announced renewed restrictions, including full or partial lockdowns
Oil prices declined to a seven-week low after Japan said it is considering the release of oil from its emergency reserves to curb surging oil prices, and from concerns that tightening pandemic measures in European countries will dampen demand.
International benchmark Brent crude was trading at $78.58 per barrel at 0619 GMT for a 0.39% loss after closing the previous session at $78.89 a barrel.
American benchmark West Texas Intermediate (WTI) was at $75.79 per barrel at the same time for a 0.19% loss after trade ended at $75.94 a barrel in the previous session.
Japan announced on Saturday the option it may take up of releasing oil from its Strategic Petroleum Reserves (SPR) to help temper soaring oil prices over an unprecedented request from US President Joe Biden last week.
However, experts say tapping reserves may be hindered by the country's laws as it can only release reserves at a time of supply constraints or natural disasters, but not to lower prices.
Japan depends on imports for virtually all of its energy resources, despite being the fifth-largest consumer of energy in the world. The country has approximately 80 million kiloliters of petroleum (equivalent to approximately 208 days of domestic consumption).
According to experts, releasing oil from strategic reserves may provide just a temporary relief for the market.
Prices also came under demand pressure after some European countries began tightening COVID-19 measures to contain the surge in infection rates, after Austria opted to implement lockdowns, and Germany, Ireland and the Netherlands imposed restrictions on the unvaccinated.
As of Monday, Austria will impose a national lockdown. Chancellor Alexander Schallenberg said Friday that the lockdown would last for a maximum of 20 days.
The country will also impose a curfew on those who are not fully vaccinated.
Germany, meanwhile, announced new coronavirus measures, including tougher restrictions for those who are unvaccinated amid record-high cases.
In Belgium, the government said most people will have to work from home four days a week until mid-December.
The Netherlands will go into a three-week partial lockdown, which sparked violent protests around the country.