WTI crude oil futures fell more than 3 percent on Monday, trading well below $69 a barrel.
The oil discount may be linked to new restrictions being put in place amid fears of the spread of omicron, a new mutation of the coronavirus.
Lockdown in the Netherlands and more capacity in the U.S.
Dutch authorities imposed a nationwide lockdown on Sunday. Other European countries are considering similar measures ahead of the Christmas and New Year holidays, which is unlikely to leave the oil market unaffected.
The International Energy Agency has warned that an increase in COVID-19 could cause a drop in global oil demand and possibly overlap with a period of rising crude supply, for example in the US. Oil rig count (an early indicator of future production) in the United States rose by three to 579 in the week to Dec. 17, reaching its highest level since April 2020, Baker Hughes said on Friday.
Stock markets don't underestimate omicron
This morning futures for the S&P 500 were trading in the region of 4550 points, for the Nasdaq 100 it was 15560 points and for the DJIA 34880 points. Futures on the Dow Jones, S&P 500 and Nasdaq 100 each lost at least 1 percent. The major indexes ended last week with losses, with the Nasdaq Composite, which is dominated by technology, down 2.95 percent.
Highly valued stocks may have been sold on the prospect of higher U.S. interest rates. Investors may also be concerned about the growing number of coronavirus cases and react to central banks tightening policy. The WHO (World Health Organization) reported Saturday that the number of cases with the new strain of coronavirus is doubling in 1.5 to 3 days in areas where pandemic restrictions are not being followed.
CFDs are complex instruments and carry a high risk of rapid cash loss due to leverage. 78% of retail investor accounts experience cash losses as a result of trading CFDs with this CFD provider. Consider whether you understand how CFDs work and whether you can afford the high risk of losing money.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
