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US oil prices fall by more than 5% due to concerns about vaccine efficacy

New York: Oil prices fell on Tuesday, and US crude oil futures fell by more than 5%. This is because the chief of Modana questioned the effectiveness of the COVID-19 vaccine against the Omicron coronavirus variant, disrupting financial markets and raising concerns about oil demand.

The head of pharmaceutical company Moderna Inc told the Financial Times that the COVID-19 vaccine is unlikely to be as effective against the Omicron variant of coronavirus as it is against the delta variant.

Brent crude oil futures fell $ 2.87 (3.9%) to $ 70.57 a barrel after hitting a intraday low of $ 70.22, the lowest since August.

Crude oil futures on West Texas Intermediate (WTI) closed at $ 3.77 (5.4%) and fell at $ 66.18 a barrel. The benchmark has fallen to a session low of $ 64.43. This is also the lowest since August.

“The threat to oil demand is real,” said Louise Dixon, senior oil market analyst at Listad Energy. There is already clear evidence from delaying the reopening from Australia and banning foreign visitors as the government prioritizes health safety over reopening plans. “

Oil plunged about 12% along with other markets on Friday. This is because they feared that a highly mutated variant of Omicron would create a new blockade and weigh on global oil demand. It is still unclear how serious the new variants are.

Federal Reserve Chair Jerome Powell could discuss accelerating the “tapering” of large-scale bond purchases at the next policy meeting in anticipation of a booming economy and continued inflation. He said he was highly sexual. Mid next year.

Following Powell’s comment, oil prices, especially US crude oil futures, fell alongside major US stock indexes, which fell by more than 1%. [.N]

Benchmark crude oil futures contract premiums for one-month loading fell dramatically on Tuesday, surpassing the six-month loading contract, an indicator that traders are watching carefully.

The higher the premium of the loading contract of the previous month, which is the market structure called backwardation, than the loading contract of the later, the stronger the view that the market is in short supply.

Brent’s six-month backwardation shrank to about $ 1.50 per barrel, the lowest since March. WTI’s six-month backwardation fell to about $ 1.90 per barrel, the lowest since September.

The oil market outlook raises expectations that OPEC, Russia, and its ally OPEC +, will withhold plans to add 400,000 barrels (bpd) per day in January.

“Given the Omicron variant and the release of oil reserves by major oil consumers, the group tends to suspend production growth,” said Vibeck Dahl, a commodity analyst at Commonwealth Bank. There are. “

Pressure had already risen within OPEC + at the December 2 meeting after the planned release to address the surge in emergency oil reserves by the United States and other major oil consuming countries last week.

OANDA analyst Edward Moya said, “Following the release of global strategic stockpiles and the announcement of dozens of countries limiting travel, OPEC and its allies can easily suspend production or even make slight cuts. Can be justified. “

OPEC’s oil production growth in November was once again below the planned increase in agreement with its allies, according to a Reuters survey on Tuesday, and the capacity of some producers prior to this week’s meeting. Focused on the shortage.

Prior to weekly industry data after the market closed, Reuters preliminary research analysts estimated that oil inventories fell by an average of 1.2 million barrels last week. [EIA/S]

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US oil prices fall by more than 5% due to concerns about vaccine efficacy

Source link US oil prices fall by more than 5% due to concerns about vaccine efficacy

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