Crude tumbles on fears of demand hit from new COVID variant as OPEC meeting looms for next week

Binance
Crude tumbles on fears of demand hit from new COVID variant as OPEC meeting looms for next week
Crude tumbles on fears of demand hit from new COVID


Crude prices slumped on Friday, with investors shedding the commodity after a possibly highly contagious new strain of COVID was detected in South Africa. West Texas Intermediate crude for January delivery 
CL00,
-4.53%

CLF22,
-4.53%
fell $3.57, or 4.6%, to $74.78 a barrel. The contract slipped 0.1% to $78.39 a barrel on the New York Mercantile Exchange on Wednesday.

Friday will mark a shortened session on the heels of the Thanksgiving Day holiday, with U.S. crude oil due to settle at 1:30 p.m. January Brent crude 
BRNF22,
-3.88%

BRN00,
-3.86%,
 the global benchmark, fell $2.81, or 3.5%, to $78.14 a barrel, following Wednesday’s finish, which left it 0.1% lower at $82.25 on ICE Futures Europe. Oil swung lower, along with U.S. stock futures and Asian equities after the discovery of a new COVID variant with a high level of mutations in South Africa, which has been experiencing a massive spike in cases in recent days. Investors poured money into gold
GC00,
+1.27%
and other perceived havens such as the Japanese yen
USDJPY,
-1.04%.
Presently known as B.1.1.529, the variant had also been detected in Botswana and Hong Kong in travelers who had visited South Africa, he said. The World Health Organization is holding an emergency meeting on Friday to assess the variant, which scientists still aren’t sure is more deadly or just more contagious. But scientists say it is the most heavily mutated so far, which could make it more transmissible than the delta variant, and that could make vaccines less effective. Already countries were taking precautionary measures, with the U.K. halting travelers from South Africa and five other nations from Friday. The variant shock comes as Europe has been battling a spike in cases across many countries, such as the economic powerhouse Germany. Austria has locked down its population, while other countries are also rolling out restrictions. “Depending on how this virus-led selloff evolves, and how concerned the WHO is of it, the calculations surrounding the OPEC+ meeting next week could change,” said Jeffrey Halley, senior market analyst at OANDA. “OPEC+ has stated repeatedly that one area of caution was the resurgence of Covid-19 eroding oil demand as the grouping raises production,” he told clients in a note. Halley added that OPEC+ is likely to not increase production above its previously agreed 400,000 bpd target next week, “unless the market situation really deteriorates next week, and oil prices experience a much deeper slump.” Traders have been questioning whether Organization of the Petroleum Exporting Countries and its allies — or OPEC+ will decide next week to scrap those output increases after a coordinated release of strategic reserves by several countries, including the U.S. The cartel and its allies has previously pushed back againsts requests by the Biden Biden administration and others to speed up production increases. OPEC+ has boosted output in monthly increments of 400,000 barrels a day as it unwinds earlier production cuts. Saudi Arabia and Russia are mulling a pause in recent output increases, The Wall Street Journal reported Wednesday, citing people familiar with the discussions. Elsewhere in the energy space, January natural-gas futures 
QGF24,
-0.73%
rose 1.1% to $5.165 per million British thermal units. December gasoline futures 
RBZ21,
-4.25%
 fell 0.8% to $2.3197 a gallon, while December heating oil 
HOZ21,
-4.32%
 tumbled 3.8% to $2.224 a gallon.

Binance



Source link

Be the first to comment

Leave a Reply

Your email address will not be published.


*