Crude oil recovers after crashing more than 10% on Friday

Highlights

  • Crude oil prices recovered on Monday.
  • The crude oil market crashed by nearly 10% on Friday.
  • Various countries across the globe have recorded rising cases of the new variant of coronavirus on Sunday.

Crude oil prices rose on Monday after recording a sharp plunge on Friday as investors focused on rising cases of the Omicron coronavirus variant and negotiations on the Iran nuclear deal. January delivery Brent Crude oil futures last traded at US$74.51 per barrel up 4.08%, whereas January delivery WTI crude oil futures traded 4.67% up at US$71.33 per barrel as of 29 November 2021 at 12:02 PM AEDT.

Friday’s oil crash

The crude oil market crashed by nearly 10% on Friday to reach the lowest level last seen in April 2020 with rising cases of the new variant of coronavirus, increasing concerns that supply surplus could extend to the first quarter of next year.

Oil price crash

Source: Copyright © 2021 Kalkine Media

The Omicron coronavirus variant spread across the world on Sunday with rising cases reported in various countries including Australia, the Netherlands, and Denmark.

OPEC+ is expected to meet on Thursday instead of Tuesday to decide and further plan to increase output by 400,000 bpd in January and beyond.

Adding to that talks on the revival of the 2015 Iran nuclear deal,  expected to resume on Monday in Vienna, adding pressure to the traders as it will increase further oil supply into the market.

Bottom Line

Crude oil prices collapsed drastically on Friday due to rising cases of the new variant of coronavirus, which could dampen the oil demand, weighing its prices. The prices were additionally weighted on news of the revival of the 2015 Iran nuclear deal that is also expected to increase the supply into the market, pressurising prices.

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