Oil closes down, with an eye on Ômicron, dollar and OPEC monthly report

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Oil retreated in the futures market this Monday (13). Investors remain concerned about the spread of the Ômicron variant of the coronavirus, which this Monday claimed its first fatality in a UK patient, as reported by local authorities. In addition, the strength of the dollar in the foreign exchange market made the commodity more expensive and, therefore, less attractive to traders trading in other currencies.

On the New York Mercantile Exchange (Nymex), a barrel of WTI oil with delivery scheduled for January closed down 0.53% (US$ 0.38), to US$ 71.29, while that of Brent for the following month yielded 1.01% (US$0.76), to US$74.39, on the Intercontinental Exchange (ICE).

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The confirmation of the first death caused by infection of the Ômicron variant of the coronavirus inspired caution in the markets this Monday, with oil, sensitive to the outlook for global activity, particularly harmed.

Analyst at CMC Markets Michael Hewson says investors are fearful that the strain’s rapid spread will prompt governments to adopt more restrictions on mobility.

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“With transferability being the main driver for the adoption of locks, particularly amid China’s ‘zero coverage’ policy, there are still valid reasons for concern,” says TD Securities.

The Canadian bank notes that investor pessimism trumped a largely positive assessment by the Organization of Petroleum Exporting Countries (OPEC) in its December monthly report.

The document maintained the projection for high global demand in 2021 and 2022. The forecast for this year’s supply outside the group rose to 680 thousand bpd, while that of the cartel itself dropped to 3.64 million.

For Capital Economics, OPEC continues to promise more than it can deliver. “The group’s production increased in November, but once again it was below expectations. We believe OPEC will continue to produce less than estimated, but should still account for a large part of the growth in world oil production next year, which should drag Brent crude to around $60 a barrel by the end of 2022”, projects the consultancy.

Reference: CNN Brasil

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