Oil prices are down more than 1%, and Brent crude is less than $75

  • 09 December, 2021
  • 5:50 pm EET

Oil prices deepened their losses by more than 1%, during trading today, Thursday, with the price of Brent crude, the benchmark, falling under the level of $75 a barrel.

And the black gold was trading in the green range early in trading, supported by the receding fears of the new Corona mutant, after comments from a number of vaccine makers about the effectiveness of Corona vaccines against Omicron, despite the intensification of some governments restrictions to stop its rapid spread.


Oil prices today

Brent crude futures prices – for February 2022 delivery – fell by 1.3%, recording $74.80 a barrel, after they were trading above $76 early in trading.

The prices of West Texas Intermediate crude futures – January delivery – fell by 1.2%, recording $71.50 a barrel.

Crude prices witnessed a volatile session, yesterday, Wednesday, between ups and downs during trading; The strong increase in gasoline and distillate inventories negatively affected crude prices, while oil inventories declined less than expected, before closing higher.

The weekly report of the US Energy Information Administration showed that oil inventories in the United States decreased by 0.2 million barrels, last week, but at a pace less than analysts’ expectations, which were referring to a decline of about 2.7 million barrels.

On the other hand, inventories of gasoline and distillates in the United States rose by 3.9 and 2.7 million barrels, respectively.


Mutant Omicron

The markets rebounded after receiving comments from the American company Pfizer, which confirmed that a third dose of its vaccine against the Corona virus may provide protection against the Omicron mutant.

“Initial indications for the omicron mutation are that it may be less severe than initially feared, given that hospitalization rates have not increased,” said Vivek Dar, commodity analyst at the Commonwealth Bank.

“A third vaccine dose also shows promising signs of protection against the new mutant,” he added.


Corona closures

However, market gains slipped; As governments have reimposed restrictions to curb the spread of Omicron, including Britain, which has directed its citizens to work from home again, Denmark has closed restaurants and schools, and China has halted group tours from Guangdong.

South Korea is seeing record infections, while cases are still high in Singapore and Australia.

“Oil demand risks have not fully diminished,” ANZ analysts said in a note, Reuters reported.

The Omicron outbreak caused Brent prices to fall 16% from 25 November to 1 December, and more than half of the decline was offset this week, but analysts say further recovery may be limited until the impact of Omicron becomes more pronounced.

Analysts said the stalling in market prices indicates that investors are struggling to find direction, also pointing to the uncertainty about oversupply by the OPEC+ alliance, which includes OPEC and allies including Russia.


Iranian threats

This comes at a time when the US and Israeli defense ministers are expected to discuss, today, Thursday, possible military exercises that would prepare for the worst-case scenario for the destruction of Iran’s nuclear facilities in the event of a failure of diplomacy and if the leaders of their countries request it.

Early winter storms in southern Russia also hampered oil operations at Black Sea ports, delaying shipments and increasing costs.

Analyst Craig Erlam said Brent was likely to encounter resistance around the lower end of the $76.50-77.50 range, which was a key support level in late September and late November.





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