Oil closes down, with market evaluating potential impact of Ômicron

Oil futures closed lower on Friday, in a session in which the market focused on the potential impact of the Ômicron variant of the coronavirus, which spreads leading to further tightening measures.

The strain is seen as a threat to demand, and the issue has gained greater prominence than the posture of central banks in recent days, especially the Federal Reserve (Fed, the US central bank).

On the New York Mercantile Exchange (Nymex), a barrel of WTI oil with delivery scheduled for February retreated 1.98% (US$ 1.43) this Friday and 1.52% in the week, to US$ 70.72, while the Brent’s price for the same month fell 2.00% in this session (US$ 2.50) and 2.17% in the accumulated weekly, to US$ 73.52, on the Intercontinental Exchange (ICE).

Taking stock of 2021, Rabobank points out that as it stands, the oil sector grew 57% and should end the year at the top of the list in terms of returns in the commodities sector.

In addition, this year will mark Brent’s biggest annual gain since the late 1990s, says the Dutch bank, which also notes that the move occurred despite an appreciation of the dollar, making the barrel more expensive for holders of other foreign exchange.

“As the tide of risk-taking after the Fed subsides, the focus on oil markets has turned to Ômicron risks and fears of an oversupply in early 2022,” comments TD Securities.

The growing conviction that the strain could lead to a surplus, which was echoed by International Energy Agency (IEA) expectations, should ultimately keep attacks from rising prices well contained in the short term, the bank points out. of investments.

In the US, shale production continues to recover at a slow pace, with capital expenditure budgets for the new year suggesting that capacity will also remain limited, assesses TD Securities.

In this context, while Ômicron threatens energy demand growth in the first quarter, an increase in global vaccine production reinforces the view that the demand impact will be short-lived, leaving supply as the upside risk for 2022, projects the bank.

The number of oil wells and platforms operating in the US rose four in the last week, to 475, said on Friday Baker Hughes, a company that provides services to the sector.