Oil prices fall on uncertain new year demand
By Jenal Mehta
12:10, 15 December 2021
The World Health Organisation (WHO) is due to have a meeting today on the implications of the Omicron Covid variant.
On Tuesday, WHO director-general Dr Tedros Adhanom Ghebreyesus made a statement warning countries should not underestimate the new strain.
He said Omicron already existed in most countries and vaccines alone would not stop the spread. The WHO meeting today will bring more clarity to the situation.
Prior to the discovery of Omicron, the Organization of the Petroleum Exporting Countries (OPEC) had decided to go ahead with an increase in oil supply for January 2022.
As it stands, OPEC expects demand to increase in the first quarter of 2022. “The impact of the new Omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage Covid-19 and its related challenges,” it said.
However, oil supplies have already been anticipated to be greater than demand during the remainder of 2022, according to the US Energy Information Administration (EIA).
The discovery of Omicron has brought excess supply concerns into focus, potentially causing oil prices to fall further than expected in the new year.
The National Oceanic and Atmospheric Administration (NOAA) has predicted warmer weather this winter for most of the United States, keeping demand for natural gas low. US Natural Gas traded around $3.80, almost 25% lower than four weeks ago.
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