Oil prices lose more than 4% due to concerns about the Omicron virus

Mohammed Abdelkhalik
November 30, 2021
Oil prices

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Oil prices fell by more than 4% during the trading session today in the European market, to resume its losses that were temporarily halted during the previous session, as US crude recorded its lowest level in three months, and Brent crude reached its lowest level in two months. The request came after the CEO of Moderna Pharmaceuticals raised doubts about the effectiveness of the current vaccines against the new mutated “Omicron” from the Coronavirus, which is expected to lead to further closures.

Oil prices continue to decline

Oil prices

West Texas Intermediate (US) crude oil fell by about 4.2% until 09:55 GMT, to trade around the level of 67.08 US dollars per barrel, the lowest since the twenty-sixth of last August, from the opening level of today’s session at 70.01 dollars, and the highest price was recorded at 71.19 dollars barrel.

The international benchmark, Brent crude, also fell by 4.0% to the lowest level of $70.48 a barrel since the first of last September, compared to the opening level of $73.40, and early in the session, it reached the lowest price at $71.18 a barrel.

At the conclusion of trading yesterday, Monday, US crude managed to achieve a gain of 2.75% in the first daily gain during the last four sessions, and Brent international crude also gained 0.75%, within breathtaking operations after prices suffered the largest daily loss since mid-April 2020.
Demand concerns

The oil price plunged by about 12% on Friday, with other markets retreating amid fears that the spread of the new mutation will trigger a new shutdown and limit global growth, which is expected to harm the levels of demand for fuel.

Stefan Bansal, president of Moderna Pharmaceuticals, said that he rules out that vaccines against the Coronavirus will be as effective against the new mutant “Omicron”, as was the case for the Delta strain, and “Bansal” added to the British Financial Times today, Tuesday, “I think it will not be as effective as it will be.” The level we had with Delta.”

Omicron virus fears dominate the market

The new mutated strain of the coronavirus “Omicron” was discovered in South Africa last week, and despite the speed of countries around the world to take all preventive measures and tighten border controls, cases of Omicron were discovered in some major countries, led by the Kingdom. United States, Germany, Australia, Japan, and many other countries.

For its part, the World Health Organization warned on Monday that Omicron poses a very high risk of increased infection. Scientists have confirmed that the new variant contains an incredibly high number of mutations, some of which raise concern for the potential effects on the course of the pandemic.

With the escalation of doubts surrounding fuel demand at the present time, expectations are growing that the OPEC + group, which includes the Organization of Petroleum Exporting Countries “OPEC” and other major producers, including Russia, will suspend their plans to add 400,000 barrels per day each month in next January.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.