Very rapid schedule changes and flight cancellations may have led to a drop in oil prices.
Sunday marked the third day that airlines from around the world canceled flights. In the United States alone, more than two thousand were canceled over the holiday weekend. Airlines say the main reason is the rapid spread of the omicron variant, which crew members are infected with. China has announced the highest daily increase in local coronavirus infections in 21 months. In the city of Xian, the number of infections more than doubled. News of the airline industry's troubles and the rapid spread of omicron may have contributed to declines in WTI crude oil prices, we recorded about $73.5 per barrel on Monday morning.
January 4 important decision in the oil market
On the other hand, crude prices still appear to be high enough that countries are beginning a coordinated release of strategic reserves to keep prices from rising. Japan has already reached into its deep reserves with South Korea announcing the release of 3.17 million barrels in January.
Markets are waiting for the next OPEC+ meeting on January 4. The group is then expected to decide whether to continue its planned 400,000 barrels per day production increase in February.
Omicron drives gold prices higher?
Gold prices held above $1,800 per ounce on Monday. The dollar and U.S. Treasury bond yields failed to gain ground despite good U.S. economic data and persistent inflation. The U.S. economy expanded at a 2.3 percent pace in the third quarter, up from an earlier estimate of 2.1 percent, the Commerce Department reported. The Federal Reserve's preferred inflation PCE index rose 5.7 percent in November, reaching its highest level since 1982 and reinforcing expectations that elevated inflation is likely to continue.
Gold, a potential hedge against inflation and market uncertainty in the investing world, could rise in price with the number of omicron infections. In the U.S., the number of new daily cases of the new mutation already exceeds data from the peak of the wave associated with the delta mutation.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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