The global energy market has reacted rather expectably to the unexpected new development in the COVID-19 virus called Omicron.
According to www.tradingeconomics.com, West Texas Intermediate (WTI) crude futures rose 5% to $72 per barrel on Monday, as traders covered short positions amid speculation of an aggressive response from OPEC+ to counter downward price pressures from the Omicron.
Oil prices crashed more than 10% on Friday as the new variant added to concerns over a projected inflated crude surplus early next year after the release of stocks by oil-consuming countries.
“OPEC+ moved its meeting from Tuesday to Thursday to give themselves more time to evaluate the impact of Omicron on the global economy and fuel demand, with markets speculating on a potential pause in output increases.
“OPEC+ has been releasing 400,000 barrels per day of oil per month while winding down its record cuts from last year
Meanwhile, talks on reviving the 2015 Iran nuclear deal will resume on Monday in Vienna, but analysts doubt that a breakthrough can be made with the US due to Iran’s atomic advances.
According to Trading Economics global macro models and analysts’ expectations, crude oil will trade at 66.24 USD/BBL by the end of this quarter.
“Looking forward, we estimate it to trade at 60.80 in 12 months’ time. Historically, crude oil reached an all-time high of 147.27 in July of 2008.”