Crude oil futures closed lower on Monday (Jan. 10) as market concerns remain that the rapid outbreak of new COVID cases could affect demand.
- WTI crude futures were down 67 cents, or 0.9%, at $78.23 a barrel.
- BRENT crude futures were down 88 cents, or 1.1%, at $80.87 a barrel.
Oil markets were pressured by concerns over the spread of the Omicron virus after China’s health authority CCDC confirmed two cases of Omicron in Tianjin. The city of Tianjin is a major port city in China. Strict travel restrictions have been imposed to prevent the spread of the Omicron virus to other cities.
The companies are concerned that the Chinese government may take new lockdown measures. This will result in production and transportation being halted. Moreover, the Chinese economy will turn for the worse, which is already affected by the weak consumer situation and the deterioration of the real estate market.
However, the oil contract was only slightly down. Factors continuing to drive oil prices include unrest in Kazakhstan, a country that produces 1.6 million barrels of oil per day, and a decline in oil production in Libya from 1.3 million barrels per day to 729,000 barrels per day due to oil field closures, as well as oil pipeline maintenance closures.
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Tuesday, January 11, 2022