The cost of the January futures contract for Brent crude oil during today’s trading fell below $ 69 per barrel, follows from the data of the London stock exchange ICE. By 20.08 Moscow time, it reached $ 68.41 – this is the minimum since 23 August. For today, Brent has fallen in price by 6%.
After this date, fuel prices began to rise, and such dynamics lasted until October 25. Then, at its peak, Brent was trading at $ 86.7 per barrel – at a record price since October 2018.
The January WTI oil futures are also getting cheaper – also by 6% per day. Today, by 20.08 Moscow time, its price fell to $ 65.26 per barrel – the minimum since 23 August. At its peak on October 25, fuel was trading at $ 85.41. This figure was a record one since October 2014.
Analysts polled by Reuters said a statement by Moderna CEO Stefan Bansel led to the sharp drop in oil prices. The day before, he told the Financial Times that the existing coronavirus vaccines are probably much less effective against the new omicron strain identified in South Africa in the first decade of November. Against this background, there is a risk that states will introduce new restrictions that will lead to a drop in fuel demand.
“The threat to oil demand is real. Another wave of restrictions could push oil demand down to 3 million bpd in the first quarter of 2022 as governments prioritize health safety over reopening plans, ”said Louise Dixon, senior oil analyst at Rystad Energy.
Fears are growing that OPEC + countries will suspend plans to increase oil supply by 400,000 barrels per day in January, said Vivek Dhar, commodity analyst at Commonwealth Bank. “We think the group will tend to suspend production growth in light of the emergence of the omicron strain and the release of oil reserves by major oil consumers,” he said. The OPEC + meeting is scheduled for December 2.
On November 23, the United States announced it was dumping 50 million barrels of oil from strategic reserves to drive down commodity prices for Americans. Together with Washington, such a decision was made by other oil-consuming countries, including India, Japan, South Korea and the UK.
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