Omicron's concerns are back!
Yesterday, OPEC released its December and the last report of 2021. According to this report, OPEC believes that as many countries around the globe actively increase their vaccination rates and take corresponding preventive measures, the pandemic is expected to have a limited impact on the 2022 economic outlook. Therefore, the organization raised the forecast for the global crude oil demand in the first quarter of next year, up to 99.13Mbd from previously 98.02 million barrels per day estimates.
Today we have the IEA monthly and API weekly reports, however, what we can see in the charts, is that market participants are ignoring all these reports as the Omicron coronavirus variant rattled investors who were already on edge ahead of such a crowd days with central bank meetings ahead, including FOM meeting.
In line with news of the first death case of Omicron variant of coronavirus in the UK and finding the first infected cases in the mainland in China, increasing oil prices were short-lived, falling by about 2.7% from overnight high to US$70.80 at the time of writing, and after short live correction in the early Asian season.
In addition, this week's Federal Reserve FOMC meeting also prompted market participants to trade a bit more cautiously. Any Hawkish policy from FED will put the stock markets under pressure and Oil demand and prices as well while holding current dovish policies, or even taking less tightening policies than expectations is positive for Stock markets and oil prices as well.
From the technical point of view, RSI at under 50, decreasing prices in line with bearish OBV trend line and moving under main MA lines in almost all time-frames also remain bearish overview in the technical analysis.
