empty
13.12.2021 04:38 PM
Oil slides after last week's rally. Experts revise demand forecasts for Q1 2022

Oil futures slided in New York after their biggest weekly jump in three months as traders weighed the risks from the omicron variant, and physical markets showed further signs of softening.

Oil slides after last week's rally. Experts revise demand forecasts for Q1 2022

This image is no longer relevant

West Texas Intermediate futures fell by 0.7% to settle near $71 a barrel in the early New York trading session. On the ICE Futures Europe exchange, Brent for February settlement slipped by 0.8% to $74.56, thus trimming earlier gains.

"The major oil contracts registered decent weekly gains, but it is noticeable that current prices are still way below the pre-Omicron levels," oil analyst Tamas Varga said.

Energy consumers are no longer confident that fuel consumption will withstand the new virus strain, which propelled crude 8.2% higher last week, especially after the news that at least one patient with Omicron has died.

On Monday, OPEC raised its world oil demand forecast for the first quarter of 2022 but left its full-year growth prediction steady, saying the Omicron coronavirus variant would have a mild impact as the world gets used to dealing with the pandemic.

Interestingly, three days ago, the market barely reacted to an announcement last Friday by the US Department of Energy that it would sell 18 million barrels of crude oil from its strategic petroleum reserve (SPR) on December 17, as part of a previous plan to try to reduce gasoline prices. Apparently, traders have already priced this factor in.

"The oil market risks facing a sizable oversupply in the first quarter of 2022... We therefore envisage potential setbacks for the oil price in the coming weeks," Commerzbank analyst Carsten Fritsch noted.

Regional markets

UK Prime Minister Boris Johnson has said the country faces an emergency from Omicron. Moreover, he does not rule out further restrictions to contain it, Johnson added. At the same time, Britain increased its investment in renewable energy sources, which also affected the local futures market.

In addition, there have been some indications that high prices have sapped consumption in Asia. Thus, Asian buyers did not ask Saudi Arabia for additional cargoes last week after the kingdom hiked prices this month. Data shows that dated to front-line swaps, used to hedge crude cargoes in the North Sea, are currently trading at discounts of about 50 cents a barrel. They were at premiums before Omicron really hit markets.

The Chinese government has also pledged to lift tough restrictions on electricity consumption in order to reduce public tensions. China has also solved coal supply problems, but the structure in the North Sea market is coming under pressure.

Global prices have received some support from forecasts that Beijing will start adding fiscal stimulus in early 2022 after the country's top officials said their key goals for next year include stabilizing the economy. This should further improve sentiment in the market, given the Asian nation is the world's biggest oil importer.

Epidemiological situation

"Risk-reward is not attractive, with the omicron spread in the initial phase," Helge Andre Martinsen, senior oil analyst at DNB Bank ASA in Oslo, said.

This month, oil has shown a partial reversal - after tumbling into a bear market in late November - on signs that nervousness around Omicron might have been overdone. Iraq's oil minister said on Sunday that he doesn't see any impact from the latest outbreak yet.

Still, traders are unsure how much scope there is for a further recovery with so much uncertainty in the outlook.

"The omicron fears are certainly continuing to shift away from the worst-case scenario," Vandana Hari, founder of Vanda Insights in Singapore, said. "The higher transmissibility is not in doubt, but the worst-case fears of a spike in hospitalizations and deaths are certainly receding. Crude still has some more ground to reclaim," she added.

The Brent crude structure itself is weakening, with the spread between the second and third monthly futures contracts at about 31 cents a barrel, down from 63 cents on November 24.

Other articles by the author:

Forex Analysis & Reviews: The rise in US prices confirms the expectation of hawkish signals from the FedForex Analysis & Reviews: Experienced investors are now looking at other markets

Forex Analysis & Reviews: Cryptocurrency traders found new market assessment tool through "Fear and Greed Index"

Forex Analysis & Reviews: Elon Musk would like to leave Tesla

Egor Danilov,
Pakar analisis InstaForex
© 2007-2025
Pilih carta masa
5
min
15
min
30
min
1
jam
4
jam
1
hari
1
minggu
Jana pendapatan melalui perubahan kadar mata wang kripto dengan InstaForex.
Muat turun MetaTrader 4 dan buka dagangan pertama anda.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    SERTAI PERADUAN

Artikel yang dicadangkan

Ringkasan Berita Pasaran Amerika Syarikat untuk 22 April

S&P 500 dan Nasdaq 100 terus menurun disebabkan oleh kebimbangan yang semakin meningkat tentang kelembapan pertumbuhan ekonomi dan kesan tarif perdagangan yang membebankan sentimen. Pasaran kekal tidak menentu, dengan pelabur

Ekaterina Kiseleva 11:13 2025-04-22 UTC+2

Trump, Fed dan emas mencecah $3,000? Pasaran bertindak balas terhadap isyarat membimbangkan

Para pelabur bimbang tentang kebebasan Fed di bawah pemerintahan Trump. Aset AS jatuh, dan dolar berada pada paras terendah dalam tempoh tiga tahun berbanding euro. Mata wang perlindungan seperti

11:46 2025-04-21 UTC+2

Ringkasan Berita Pasaran Amerika Syarikat untuk 21 April

Indeks S&P 500 dan Nasdaq sekali lagi mengalami penyusutan selepas Donald Trump mengkritik hebat Rizab Persekutuan. Kenyataan beliau menimbulkan persoalan terhadap kebebasan bank pusat tersebut, sekali gus memperkuatkan kebimbangan berkaitan

Ekaterina Kiseleva 11:41 2025-04-21 UTC+2

Ringkasan Berita Pasaran Amerika Syarikat untuk 18 April

Donald Trump meningkatkan lagi kritikannya terhadap Pengerusi Rizab Persekutuan, Jerome Powell, sekali lagi menggesa agar kadar faedah diturunkan serta-merta. Tekanan politik yang diperbaharui ini menambah ketegangan yang sedia

Ekaterina Kiseleva 12:09 2025-04-18 UTC+2

Powell dalam bahaya? Bolehkah Trump memecat Pengerusi Fed dan apakah maknanya kepada pasaran?

Donald Trump sekali lagi menetapkan matlamatnya kepada Rizab Persekutuan, menuduh pengerusinya Jerome Powell gagal dalam dasar monetari dan mengancam untuk memecatnya. Tetapi apakah punca serangan ini: ancaman sebenar kepada kebebasan

Аlena Ivannitskaya 08:43 2025-04-18 UTC+2

Rangkuman Berita Pasaran Amerika Syarikat untuk 17 April

Kenyataan terkini Jerome Powell mencetuskan penjualan besar-besaran dalam ekuiti AS. Kedua-dua S&P 500 dan Nasdaq mencatatkan kerugian ketara selepas pengerusi Fed berkata bahawa kadar faedah berkemungkinan kekal tidak berubah sehingga

Ekaterina Kiseleva 11:21 2025-04-17 UTC+2

Pasaran saham AS dalam zon merah: Dow Jones – 0.4%, Nasdaq – 0.1%. Laporan korporat yang memberangsangkan tidak menyelamatkan Wall Street

Pasaran saham AS ditutup pada hari Selasa dengan kerugian kecil, kerana ketidakpastian mengenai duti perdagangan terus membebani sentimen pelabur. Saham pengguna dan penjagaan kesihatan terjejas terutamanya, walaupun laporan pendapatan yang

11:38 2025-04-16 UTC+2

Ringkasan Berita Pasaran Amerika Syarikat untuk 16 April

Wall Street menamatkan sesi dengan penurunan. Saham gergasi Boeing dan Johnson & Johnson mengalami kerugian terbesar apabila ketidakpastian mengenai dasar tarif terus membebankan sentimen pelabur. Sementara sektor perbankan mencatatkan keuntungan

Ekaterina Kiseleva 11:12 2025-04-16 UTC+2

Apple melonjak. Pelabur saham memberi amaran kepada laporan Netflix

Saham AS mencetak keuntungan sederhana kerana tarif ke atas beberapa barangan elektronik telah ditangguhkan. Saham teknologi lebih berprestasi daripada rakan sejawatan Eropah dan Asia, dengan saham Apple melonjak. Goldman Sachs

11:42 2025-04-15 UTC+2

Ringkasan Berita Pasaran Amerika Syarikat untuk 15 April

Pentadbiran Trump telah membuat konsesi: tarif ke atas elektronik telah ditangguhkan sementara, dan syarat yang lebih longgar untuk industri automotif sedang dipertimbangkan. Langkah-langkah ini mencetuskan reaksi positif — S&P

Ekaterina Kiseleva 11:29 2025-04-15 UTC+2
Tidak boleh bertanya sekarang?
Tanya soalan anda di Ruangan bersembang.
Panggilan semula Widget
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.