Americas News
Oil Dips Slightly On Lazy Pre-Christmas Trading, But A Pickup Is Anticipated
Heading into Christmas and with only 125,000 Brent contracts traded on Friday, little could be interpreted about the commodity slipping 0.9 percent toward $76 per barrel; however, the dawning awareness that omicron causing far less demand damage than initially thought seemed intact.
Francisco Blanch, global head of commodities and derivatives research at Bank of America, told Bloomberg television, "If the news are indeed confirmed that omicron is going to be fast and furious, not going to be quite as dangerous, that could end up being quite bullish for oil next year.
"There's a risk oil spikes next year."
The U.K. Health Security Agency echoed the findings of health agencies in other countries by noting that someone infected with omicron is 50 percent to 70 percent less likely to be admitted to hospital compared with the delta strain.
Meanwhile, media reported on Friday that the one key issue of 2021 – high gas prices – wasn't the result of politics but financial pressure on oil companies from a decade of cash-flow losses that caused a 60 percent reduction in new well investment and a concurrent failure to recover with the economy.
Given these circumstances, Stewart Glickman, analyst at CFRA Research, pointed out that the worst combination for gas purchasers would be a quick recovery from omicron, followed by a surge in economic activity and continued low spending, as it could pull gas prices toward $4 per gallon again in the U.S.
As for trading activity in the remaining days of 2021, Christopher Lewis, a trader and commodities analyst, wrote in FX Empire on Friday that since the focus is shifting away from omicron and toward a pickup in demand for energy, "I think the market is one that you buy on dips, you are looking for value to take advantage of going forward; I anticipate that we go looking towards $80 over the next several weeks."
