Rapidly increasing numbers of new Omicron cases in Europe and the U.S. caused $OIL.WTI prices to drop by around 2.2% last week.

And this week, Crude oil took another push lower on Monday, with the $66.15 low, marking the 2-week low. This was the market reaction to the Netherlands announcing it will go into a full lockdown on Sunday. 🛢📉

Growing fears across the board 😱

Fresh reports from the World Health Organization (WHO) have stated that the Omicron variant can result in the number of cases doubling every 1.5 to 3 days in areas of local spread.

Bearing in mind the upcoming Christmas and New Year holidays, fears are now growing that more European countries will follow the Netherlands with lockdowns and restrictions. This can then pave the way to more volatile crude oil trading in the coming weeks.

Even the announcement from Moderna that the third dose of its mRNA vaccine against Covid-19 appears to provide a significant degree of protection against the Omicron variant didn’t help to reassure the traders as Crude oil prices still closed in the red on Monday.

It's not all bad news, tho 🤞

On the other hand, Crude oil prices are supported by the belief of a group of analysts that there won’t be enough oil supply to fuel the global economic rebound. This is in line with Saudi Arabia’s recent claims that oil production could fall significantly in the years to come.

As far as the production is concerned, the latest report from Baked Hughes showed that the total number of oil and gas rigs rose to 579, the highest number of rigs since April of 2020. This means the US energy companies added new oil rigs for a second week in a row.

The key question right now❓

How will the latest Covid-19 wave affect the oil demand in the long run?

A few days ago, Goldman Sachs told its clients that the next year is likely to yield a new high in oil demand. Ultimately, these positive trends can push oil prices to above $100.00 per barrel, according to Damien Courvalin, the investment bank’s head of energy research.

Technically, a rebound in crude oil prices is capped by the 200 Daily Moving Average that now comes at around $71. On the downside, Crude oil price is supported by the confluence of support sitting around $66.00.

Watch out for $OIL.WTI! 📊

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