Omicron fear dampens oil demand

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Omicron fear dampens oil demand

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 Omicron fear dampens oil demand
Image source: © Argus456 | Megapixl.com

Highlights

  • Crude oil price eased on Monday.
  • More than 60 countries across the globe have shown a very high global risk.
  • Governments across the globe including Norway and Britain were tightening restrictions to curb the spread of the virus.

Crude oil price eased on Monday on expectations that its demand would reduce amid rising cases of Omicron variant across the globe.

February delivery Brent Crude oil futures last traded at US$74.41 per barrel up 0.27%, whereas January delivery WTI crude oil futures traded 0.36% down at US$71.03 per barrel as of 14 December 2021 at 12:09 PM AEDT.

Rising omicron concerns and crude oil prices

More than 60 countries across the globe have shown a very high global risk. Additionally, some evidence also states that the new variant evades vaccine protection, as per the World Health Organisation.

The Organisation of the Petroleum Exporting Countries (OPEC) along with its allies raised the demand forecast for the initial quarter of 2022. However, the cartel is also left its full-year growth plan steady, stating that the Omicron variant would have a mild impact on the demands.

Governments across the globe including Norway and Britain were tightening restrictions to curb the spread of the virus.

Oil rig

Source: © Tebnad | Megapixl.com

China’s Zhejiang was also fighting with its first COVID-19 cluster this year with thousands of citizens in quarantine.

OPEC along with its allies, together known as OPEC+ are set to meet on 4 January to discuss further outputs.

Meanwhile, natural gas prices surged nearly 11% in Europe on Monday on colder forecasts and on news that Gazprom's Nord Stream 2 will remain shut if Russia renews aggression against Ukraine.

Bottom Line

Crude oil prices eased on Monday on concerns that rising cases of Omicron variant of coronavirus would squeeze the crude oil demand in the future.  

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