Oil prices dropped on Tuesday after the United States announced plans to release up to 50 million barrels of oil from its reserves to cool the market.
U.S. President Joe Biden's administration said it will release 50 million barrels from the U.S. Strategic Petroleum Reserves in the coming months.
The combination of a loan and a sale from the reserves was being in made concert with other releases from strategic reserves by China, India, South Korea, Japan and Great Britain, the White House said.
Brent crude futures fell 61 cents, or 0.77%, to $79.09 a barrel by 1213 GMT and U.S. West Texas Intermediate (WTI) crude futures were down $1.06, or 1.38%, at $75.69.
The OPEC+ alliance between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia has so far rebuffed repeated requests from Washington to pump more oil.
On Monday prices rose more than 1% on reports that the group could adjust planned increases to output if large consuming countries release crude from reserves or if the pandemic dampens demand.
Prices have dropped below $80 a barrel from a three-year high of more than $86 on Oct. 25 amid talks of a coordinated release and potential hit to energy demand from a fourth wave of COVID-19 cases in Europe.
A release from reserves is expected to have only a temporary impact on prices, analysts have said.
"As Europe, and in particular Eastern Europe, struggles to halt the spread of COVID-19, the risk of lockdown-like measures looms large," said Rystad Energy analyst Louise Dickson.
She said demand in November for road and jet fuel in Europe is expected to fall to 7.8 million barrels per day (bpd) from 8.1 million bpd in October, though part of that is a normal decline for this time of year.
"If a new wave of lockdowns are enacted in Europe, oil prices will not be spared during the remainder of the flu season in the northern hemisphere," Dickson said in emailed comments.
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