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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Nightmare November For Oil As Prices Plunge Again

  • Oil prices plunged again early on Tuesday morning as uncertainty over the new Covid variant persists
  • Oil prices are set for their largest monthly drop since March 2020 at the start of the pandemic
  • Despite reassurances from the Pfizer CEO about the effectiveness of the vaccine, global markets are on edge about the new variant
Oil

After a brief respite on Monday, oil prices plunged again early on Tuesday as the market continues to fret about the potential impact of the new COVID variant Omicron on economies and oil demand.

Oil prices are set for a 20-percent slide for the month of November, the worst monthly drop in crude benchmarks since March 2020 at the start of the pandemic.  

As of 10:25 a.m. EST on the last day of November, WTI Crude prices were down by 3.02% at $67.87, and Brent Crude had dipped 3.24% to $71.06.

Oil prices had recovered on Monday a small part of the losses from Friday but fell again on Tuesday after Moderna’s chief executive Stéphane Bancel told the Financial Times that existing vaccines could see “a material drop” in their efficacy against Omicron.

Pfizer, however, said on Monday that its vaccine would likely work on the Omicron variant, with CEO Albert Bourla telling Bloomberg he doesn’t believe the variant would fully escape protection with existing vaccines. Related: Oil Prices Bounce Back After ‘Black Friday’ Collapse

Yet, considering that it’s still early days in the research of Omicron and its characteristics, uncertainty weighs on markets, including on the oil market.

“Brent crude oil already heading for its biggest monthly loss since March 2020 trades below its 200-day moving average for the first time in a year, a sign that more weakness may lie ahead, thereby raising the prospect for OPEC+ deciding to pause or perhaps even make a temporary production cut,” Saxo Bank said in a Tuesday note.

OPEC+ meets on Thursday to decide production levels for January. The group has already postponed a technical panel meeting from Monday to Wednesday to have more time to assess the potential impacts of the Omicron variant on oil demand.

Alongside oil prices, the U.S. natural gas benchmark, Henry Hub, was also plunging early on Tuesday, down by over 6% to $4.537 per million British thermal units (MMBtu)—the lowest level in three months, on the back of forecasts of a warmer-than-expected winter.

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on November 30 2021 said:
    What a strange world we live in when the the level on which oil prices will eventually settle, the decisions OPEC+ will take in its forthcoming meeting towards the end of the week and whether the global economy goes into reverse will be decided by WHO’s verdict on the Omicron virus.

    Until then, concerns and fear about the new variant will continue to drag oil prices down despite the robustness of both the global economy and the global oil demand.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • George Doolittle on November 30 2021 said:
    Massive US equity liquidation is annihilating all these nutty commodity speculators. "All Fed Chair Powell's of course!"

    Long US Treasuries strong buy as everyone goes back to front running the Fed.

Leave a comment




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