Crude Oil Prices Fell by Over $2 On Signs of Oversupply

Crude oil prices closed yesterday (Dec. 20) down $2.63. News from governments and the IEA apparently have market participants fearing that the Omicron strain will affect oil demand. Memories of the beginning of the pandemic in 2020 are still in the heads of investors who are now cautiously sorting through the various news.

  • WTI crude futures fell $2.63 to close at $68.23 a barrel.
  • Brent crude futures fell $2 to close at $71.52 a barrel.

The omicron has now spread to 90 countries around the world. As a result, governments will likely see the need to tighten measures to contain the spread of COVID-19. This will limit travel activities which will certainly affect the demand for oil. On the other hand, the cold winter months are now upon us, during which many countries will also be dependent on heating oil.

IEA already warned of the Omicron strain outbreak.

The IEA reports that there is an oversupply of oil in the global oil market. And this situation will worsen in early 2022 when Omicron will affect international travel.

According to various news reports, gasoline prices have also dropped in various parts of the U.S., which could be signs of easing.

In addition, Baker Hughes reported that oil and gas rigs active in the United States rose by three last week to 579, indicating more U.S. oil and natural gas production.

The Spot Market is Open

Tuesday, December 21, 2021

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
08.30

69.00

+0.39

+0.57%

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