It’s gearing up to be an exciting week to be an oil trader, with crude oil prices sliding lower, overturning the previous session’s gains on rising expectations that leading energy consuming nations will release their strategic oil reserves to make the commodity more affordable for their consumers. At the time of writing, WTI crude oil is trading at around $76.22 per barrel.

Later today, the US Department of Energy is likely to announce a loan of crude oil from its emergency stockpiles in a bid to combat the surge in oil prices. This move, in coordination with leading energy consumers in Asia such as China, India and Japan, comes after the OPEC turned down US President Biden’s appeals to raise crude production as oil demand rebounds worldwide.

According to a recent Reuters report, however, OPEC and its allies cannot implement a sharp hike in crude output suddenly. The leading oil producing nations fell short of their goals to increase output by 400k bpd as well, with their overall output 700k bpd less than their goals during September and October. This is on account of a severe reduction in investment in production due to the COVID-19 pandemic and environmental pressures weighing on the smaller oil producers, excluding Saudi Arabia, the UAE and Iraq.

In the previous session, some optimistic news reports suggested that OPEC+ may react to countries releasing SPRs or a decline in demand due to the latest lockdowns in Europe by adjusting their outputs further. This news sent crude oil higher by 1% on Monday, although analysts expect the release of SPRs by countries to have only a temporary impact on oil prices.

The bigger concern weighing on oil traders’ mood lately is the COVID-19 outbreak across Europe, which has forced many countries to impose lockdowns and other restrictions. Markets are worried that the outbreak could drive down demand for oil in the continent, which in turn could soften prices of the commodity in the coming sessions.