WTI Returns Above $ 76.00 As Traders Continue To Price Omicron Risk

  • WTI is trading just above $ 76.00, supported by Omicron’s pessimism that has been discounted and amid supply outages.
  • WTI is trading $ 2.0 below pre-Omicron levels above $ 78.00, suggesting that fears of an economic disruption have mostly been removed.

Oil prices have reduced previous earnings with the futures of the WTI The first month currently trading just above $ 76.00, after encountering resistance at the 50-day moving average at $ 76.66 and the $ 77.00 level earlier in the session. WTI continues to trade substantial gains on the week of nearly $ 2.50 (up 3.0%), after breaking through resistance at the $ 74.00 and $ 75.00 areas on Monday.

Crude oil prices have moved higher in recent sessions in tandem with global equity markets and other risk assets as traders continue to appreciate the pessimism related to Omicron. Studies last week showed that the infection with the new Covid-19 variant was comparatively mild, reducing pressure on governments to implement harmful economic closures and travel restrictions that destroy oil demand. WTI is trading around $ 2.0 below its pre-Omicron levels just above $ 78.00, indicating the fact that most of the fears associated with economic disruption have now been removed.

Traders have also been citing supply disruptions in countries such as Ecuador, Libya and Nigeria as positive for oil prices this week, with producers in each of these countries declaring force majeure amid maintenance problems among other things. Coming soon, the US weekly private crude oil inventory numbers will be released at 9:30 PM before the official EIA release at 3:30 PM on Wednesday. A poll released by Reuters on Monday showed that inventories are expected to post a fifth straight draw (just over 3.2 million barrels). Beyond that, the next OPEC + meeting (Jan 4) is fast approaching and traders will be on the lookout for any comments from oil ministers / information from insiders.

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