Omicron and dollar strengthening prevent oil prices from recovering

On Tuesday, December 14, oil trading ended in decline. Brent crude oil fell 1.41% to $ 73.19 per barrel. The oil market remained under pressure due to the strengthening of the dollar and the deterioration of the International Energy Agency (IEA) forecasts for oil demand for the current and next years.

The IEA said the new COVID variant will dampen the recovery in global demand. The agency has downgraded the estimate of oil demand by 100 thousand barrels per day for 2021 and 2022.

Data from the American Petroleum Institute (API) showed that oil reserves fell by 0.815 million barrels (forecast was -2.1 million). Gasoline stocks increased by 0.426 million barrels (the forecast was +1.6 million). Distillate stocks decreased by 1.016 million barrels (the forecast was +0.7 million).

On Wednesday, December 15, at the auctions in Asia, oil remains trading in the red. A barrel of Brent costs $ 72.86. Market participants are waiting for the decision of the US Federal Reserve, as well as a new portion of news on the Omicron strain. The technical picture for buyers has deteriorated. In the American session, high volatility is expected on all exchanges. The decline in oil is modest as market fears over the proliferation of Omicron eased after reports that two doses of Pfizer-BioNTech vaccine provide 70% protection against the new variant. Everyone hopes that Omicron is the last strain and that energy demand will recover in 2022.