Omicron Fears Send Oil Prices Tumbling

Author: Daniel Guttman   Date:

A sharp rise in global Omicron variant cases has sent oil prices tumbling.  At the time of this writing, WTI crude is trading at $66.77, down $4.09 for the day.  The United States hasn’t committed to new lockdowns; however, many other countries are implementing new policies that will certainly lead to demand destruction.

Officials from the United Kingdom are meeting today to discuss potential restrictions, Germany is banning travelers from the U.K., Ireland has instituted 8 p.m. curfews for bars, restaurants and live events, and the Netherlands has implemented strict lockdowns that will be in place until mid-January.  The international Energy Agency (IEA) recently stated that the Omicron wave of cases wouldn’t create as much demand destruction as previous variants, however the market is largely disregarding this statement and is in sell-mode.  Governments are clearly trying to avoid lockdowns, if possible, but they’re slowly giving in to the reality of Omicron’s impact on their populations.

Bearish sentiments have gripped the market as lower trading volume frequently leads to severe price swings.  Traders are taking a risk-off approach as they attempt to digest the Omicron data and what impact it will have moving forward.  It would certainly appear that Q1 2022 is setting up for significant volatility as headlines are moving intraday markets to the extremes.

https://www.reuters.com/markets/commodities/oil-prices-drop-2-rapid-omicron-spread-dims-fuel-demand-outlook-2021-12-20/

https://oilprice.com/Energy/Oil-Prices/Oil-Prices-Crash-On-Renewed-Omicron-Panic.html

https://www.bloomberg.com/news/articles/2021-12-19/brent-crude-extends-decline-with-bearish-headwinds-mounting?sref=rl5GZj6e

https://weather.com/en-IN/india/coronavirus/news/2021-12-18-four-hospitals-in-delhi-to-treat-omicron-cases

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Daniel is Vice President of Fleet Card Services. His focus is on growing Guttman Energy’s Fleet Card Services business, including our Fuelman Fleet card and Pac Pride commercial fueling operations Daniel’s responsibilities include finding new offerings to enhance our card offering, improving the profitability of the business, and driving growth through both new customer additions and acquisitions of competitive card decks. Prior to his current role, Daniel served as the Manager of Business Development. His previous roles also include data analyst, wholesale and commercial sales, as well as pipeline scheduling. Daniel received his Bachelor of Arts degree from the University of Vermont and has earned educational certificates from the University of Pittsburgh, the Kellogg School of Business at Northwestern University, and Harvard Business School. Daniel Guttman has become the first fourth generation family member to become an executive of the company. Daniel’s great-grandfather founded the Company in 1931.

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