Futures on US West Texas Intermediate Crude Oil retreated on Friday, following two straight trading sessions of gains, and were heading for a weekly loss on concerns the rapid spread of the Omicron coronavirus strain may lead to new restrictions that could affect fuel demand.
In countries such as South Africa, the United Kingdom and Denmark, new Omicron infections have been doubling every two days. Meanwhile, in the United States, this new COVID-19 variant has prompted a number of companies to postpone plans to bring their employees back into the office.
“Messages of caution and warnings of a worsening COVID wave are starting to ring louder with the approach of the year-end holiday season, dampening market sentiment,” Vandana Hari, energy analyst at Vanda Insights, was quoted as saying by Reuters.
“Crude may remain in a holding pattern, albeit with plenty of price volatility around the mean, in holiday-thinned trading over the next couple of weeks.”
On the other hand, according to Goldman Sachs, Omicron has had a limited effect on mobility or oil demand, while the Wall Street bank projects oil consumption to reach record high levels in the next two years.
Improvement on the oil supply side has caused prices to move away from multi-year highs earlier in Q4.
“Supply tightness is easing with a monthly addition of 400,000 barrels per day (bpd) from OPEC+ and U.S. oil output of 11.7 million bpd,” ANZ analysts wrote in a Friday note to clients.
As of 9:51 GMT on Thursday WTI Crude Oil Futures were retreating 1.47% to trade at $71.09 per barrel, while moving within a daily range of $70.96-$72.05 per barrel. WTI Crude Oil Futures were set to register a weekly loss, while being down 0.81%.
At the same time, Brent Oil Futures were losing 0.98% on the day to trade at $73.87 per barrel, while moving within a daily range of $73.82-$74.97 per barrel. Brent Oil Futures were also poised to register a weekly loss, while being down 1.87%.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $71.92
R1 – $72.97
R2 – $73.79
R3 – $74.84
R4 – $75.89
S1 – $71.10
S2 – $70.05
S3 – $69.23
S4 – $68.41
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $74.73
R1 – $75.44
R2 – $76.28
R3 – $76.99
R4 – $77.70
S1 – $73.89
S2 – $73.18
S3 – $72.34
S4 – $71.50
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