Over the last week or so, the release of a new Covid-19 variant Omicron has caused widespread volatility in the financial markets.
Nowhere was this more evident than in the case of oil, which saw sharp falls amid concerns about the effectiveness of existing vaccines against the variant, and fears of reintroduction of government restrictions.
The World Health Organization’s decision to designate Omicron as a variant of care has caused Brent crude prices to plunge more than 14% in just over a week.
However, over the weekend, reports from South Africa stated that so far, Omicron cases have presented only mild symptoms. In addition, top U.S. health official Dr. Anthony Fauci also stated over the weekend that the early data on the new variant is “encouraging.”
This ray of hope has instilled fresh confidence in the markets this week and suggested that the worst case scenario, which has already been taken into account in oil prices, may not materialize in the end.
The weekend also saw indirect negotiations cease between the United States and Iran on the restoration of the Iranian nuclear deal. Although negotiations could still be fruitful, a postponed resolution will further delay the return of Iranian oil.
Yesterday, as a result of both of these factors, Brent crude prices recovered more than 5% and they continued to rise on Tuesday morning.
Although current news is positive for crude oil, last week’s sell-off serves as a reminder that the pandemic is not completely over and that oil prices will remain particularly vulnerable to some new developments.
Pictured: Admirals MetaTrader 5 – Brent Crude Oil H1 Chart. Date range: 15 November 2021 – 7 December 2021. Date Captured: 7 December 2021. Past performance is not a reliable indicator of future results.
Five-year development in price:
Pictured: Admirals MetaTrader 5 – Brent Crude Oil Weekly Chart. Date range: 24 May 2015 – 7 December 2021. Date Captured: 7 December 2021. Past performance is not a reliable indicator of future results.
Trade Commodity CFDs with Admirals
With Admiral’s Trade.MT5 account, you can trade Contracts for Difference (CFDs) on Brent crude, WTI, gold, silver and many other commodities! CFDs allow traders to try to take advantage of both rising and falling prices, while also taking advantage of the use of leverage! Click the banner below to open an account today:
INFORMATION ON ANALYSIS MATTERS:
The data provided provides additional information on all analyzes, estimates, forecasts, forecasts, market reviews, weekly prospects or other similar estimates or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark. (hereinafter). “Admiral Markets”) Before making any investment decisions please pay close attention to the following:
- This is marketing communication. The content is published for informational purposes only and is in no way considered as investment advice or recommendation. It was not prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on trading prior to the dissemination of investment research.
- Any investment decision is made by each customer alone, while Admiral Markets is not responsible for any loss or damage arising from such decision, whether or not based on the content.
- In order to protect the interests of our clients and the objectivity of the Analysis, Admiral Markets has established such internal procedures for the prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst, Roberto Rojas (analyst), (hereinafter “Author”) based on their personal assessments.
- While every reasonable effort is made to ensure that all sources of content are reliable and that all information is presented in the most comprehensible, timely, accurate and complete manner possible, Admiral Markets does not warrant the accuracy or completeness of any . information contained within the Analysis.
- Any past or model performance of financial instruments indicated within the content shall not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument can both increase and decrease and the preservation of the value value is not guaranteed.
- Utilized products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please make sure you fully understand the risks involved.