Oil Prices Rise Slowly Since Investors Exaggerated Omicron News
Oil prices have slowly risen since investors exaggerated the Omicron news, causing oil prices to drop 16%. Brent, the benchmark for crude oil, has risen 9% since December 1, indicating that demand for oil is unlikely to decline in the near future. Even the airline industry, which is usually the most affected by new versions, has seen only a slight reduction in the number of seats.
Traders should also keep in mind that last week’s crude oil inventory data, which is provided once a week, indicated a smaller-than-expected inventory reduction. Only 240,000 barrels of crude oil were added to inventories. Meanwhile, US oil production increased to 11.7 million barrels per day. The smaller than expected reduction in oil inventories, along with an increase in US production, indicate that supply is likely to jump in the short term, causing prices to rise.
As investors anticipate the release of consumer price data on Friday, gold price activity has been fairly neutral. T-bill yields rise as Omicron is expected to have little influence over the US economy and the Federal Reserve will continue its plan to accelerate tapering, which will cause interest rates to rise more quickly from the US. next year. When interest rates rise, the opportunity cost of owning gold increases, making the yellow metal less tempting to investors.