WTI falls to week-long lows below $ 75.00 with traders worried about rising Omicron, OPEC + and US production.

• WTI recently fell below $ 75.00 to week-long lows as traders worry about rising Omicron infections and a possible spike in hospitalizations.
• Increased production from OPEC + and the US also weakens the bullish situation, with OPEC + expected to accept higher production this week.
• Hence, the 50 DMA may continue to act as a significant area of ​​short-term resistance.

Initial optimism in the oil markets that saw the future of the WTI in the first month at a time exceeding $ 76.00 during early European trading has given way with the arrival of US market participants, and the WTI has dropped below $ 75.00 recently. The main benchmark for US light crude oil is now trading at its lowest level since last Monday’s rise below key resistance at the $ 75.00 zone and is down about 75 cents on the day. (approximately 1.0%). The $ 75.00 zone has been unsupported so far, implying that oil may see more selling (technically boosted) as short-term bears look for a test of $ 74.00.

In terms of the top topics being cited as drivers of oil market price action at the beginning of the week and the first trading session of 2022, there is some focus on increasing Omicron infection rates. As cases hit record highs in the UK, Europe and the US, investors are bracing for a surge in hospitalizations. Although the scientific community seems to agree that Ómicron is roughly three times less likely to result in hospitalization (from infection), its high transmissibility means the risk of hospitals refilling is worth considering. British Prime Minister Boris Johnson warned on Monday that UK hospitals face considerable pressure in the coming weeks and that options (i.e. the possibility of tighter restrictions) remain under review.

This could be affecting prices this morning. In terms of oil specific news, there was some focus on the news of a 200,000 BPD blackout in Libya, which will last for a week, due to maintenance, but this hardly matters in the grand scheme of things, therefore, for what did not offer durable support pricing. Oil markets are not expected to be as tight as they were a few months ago as OPEC + and the US continue to increase production. Regarding the first; More OPEC + sources said the cartel will stick to its plans to increase production of 40,000 barrels per day per month when they meet this week, which means 400,000 more barrels per day starting in February. The group meets Tuesday to discuss production policy, after agreeing on Monday to name Haitham Al Ghais of Kuwait as its new secretary general. This appointment is not expected to influence policy.