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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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Oil Prices Crash On Renewed Omicron Panic

Crude oil prices took a dive on Monday morning with WTI crashing 6% on the day as fresh Omicron fears spooked the market. 

At 11:32 a.m. EDT, WTI crude was trading at $66.44, down $4.42 (-6.24%) on the day, with Brent crude trading at $69.69, down $3.83 (5.21%) per barrel as traders fear the demand destruction that could result from fresh lockdown measures taken to curb the spread of the new Omicron variant of the coronavirus. 

The United Kingdom said it would not rule out coronavirus restrictions before Christmas after the government previously recommended working from home if possible. Boris Johnson and his cabinet are scheduled to meet on Monday to discuss these tougher measures. 

While the U.S. is unlikely to institute new lockdowns, New York City is considering nixing its New Year’s party in Times Square. Omicron, already present in 89 separate countries, is prompting other countries to employ further restrictions. The Netherlands implemented new strict lockdowns on Sunday, with bars, restaurants, and nonessential shops ordered shut until mid-January. And only four guests will be allowed per household over the holidays. Prime Minister Mark Rutte called the strict measures “unavoidable”.  

Germany will ban travelers from the U.K. starting on Monday, and Ireland has instituted an 8 p.m. curfew for bars, restaurants, and live events.

These lockdowns are spooking the crude oil markets, which was banking on oil demand perking up in the first half of next year. The IEA, however, said last week that while the surge in Covid cases was set to temporarily slow the recovery in global oil demand, the impact of the Omicron variant would likely be more muted than previous waves and wouldn’t’ upend the current demand recovery.

The market, however, isn’t buying those reassurances—at least not today.

By Julianne Geiger for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on December 20 2021 said:
    Excessive and mostly unjustified concerns about the Omicron virus are casting dark clouds over the global oil market with some European countries like the Netherland re-introducing lock down. This naturally is spreading fear that other major economies in the world might follow suit and this has adversely impacted prices despite the fact that both the global economy and global oil demand are very robust.

    The western world seems intent on ignoring reports from South Africa’s medical authorities telling them that while the Omicron variant is highly transmissible, it is far less dangerous that the Delta virus and has so far displayed very mild symptoms and very few deaths around the world. Furthermore, hospitalization rates have not increased much around the world. But the western world doesn’t want to listen simply because the medical data is originating from an African country. I assure you that if this same data came from a European country or the United States, it would have been accepted without a whimper.

    But they ignore the fact that South Africa’s medical establishment is among the most advanced in the world. After all, it was a South African surgeon, the late Christiaan Barnard who performed in 1967 the world’s first heart transplant at Groote Schuur Hospital in Cape Town.

    It is also possible that some medical scientists in the UK, Europe and the United States may have initially exaggerated the danger from the new variant because they didn’t have enough data to make a judgement or because they didn’t wasn’t to accept the South African medical data. They didn’t want to retract their earliest statements out of vanity. So they have been calling for much tougher measures and even a return to lockdown.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Randy Steinman on December 23 2021 said:
    Well it didn’t last very long did it ? It’s back up again, and heading higher.

Leave a comment




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