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Oil prices fall on fears of Omicron impact, slow growth

By Fitri Wulandari

05:29, 10 December 2021

Pouring oil from orange barrel, black fluid 3D illustration
New restrictions to slow Omicron variant may hit oil demand – Photo: Shutterstock

Oil prices extended losses on Friday weighed by concerns about Omicron’s impact on energy demand and the outcome from the US Federal Reserve’s meeting next week.

International benchmark Brent crude oil futures dropped 0.13% to $74.32 per barrel on Friday, while West Texas Intermediate (WTI) fell 0.28% to $70.74/bbl.

“There are many negative factors that pressure oil prices for the short-term, but the main one is the fear of Covid-19’s Omicron,” said Lukman Leong, an analyst at the Jakarta-based Deu Calion Futures to

“UK has announced new Covid-19 restrictions. Markets expect Germany to follow and other countries,” Leong added.

Negative factors

Al Jazeera reported that British Prime Minister Boris Johnson announced measures to tackle the spread of Omicron, including work-from-home orders, wearing masks in public places and the use of vaccine passes. 

Markets also have their eyes on the US Federal Reserve’s meeting next week for signs of tightening economic policy from the US, Lukman said.

ING Group in a note on Friday said that downgrading of two Chinese property developers to restricted default by Fitch Ratings would not have helped sentiment for the oil market either.


2,072.25 Price
+1.760% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 22:00 (UTC)
Spread 0.30


0.63 Price
-0.410% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


16,001.20 Price
+0.470% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 7.0

Oil - Crude

74.50 Price
-1.560% 1D Chg, %
Long position overnight fee -0.0136%
Short position overnight fee -0.0083%
Overnight fee time 22:00 (UTC)
Spread 0.040

Fitch Ratings on Thursday downgraded ratings for Chinese real estate developers Evergrande and Kaisa after the companies defaulted on foreign debts. This has mounted doubts about China’s economic growth.

Iran nuclear talks

Despite a slew of bearish factors, a potential stalemate in talks over the possible resumption of the 2015 nuclear deal between Iran and world power nations offered support to the oil market.

Reuters reported on Thursday that the Iran nuclear talks resumed in Vienna with the United States and Israel ramping up rhetorical pressure on Tehran about the possible economic or military consequences if diplomacy fails. Iran demands all sanctions imposed by the US in 2018 to be lifted in a verifiable process.

“There are no results so far from the talk and that’s positive for oil prices,” said Lukman.

If the sanctions on Iran were lifted, the country would be able to resume oil exports, potentially increasing supply in the market.

Read more: Fear of Omicron affects oil futures

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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