Oil Price Fundamental Daily Forecast – Omicron Demand Fears, Rising US Rig Count Weigh on Crude,
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower late Friday, putting the markets in a position to post a weekly loss. The “virus-on, virus-off” scenario continued throughout the session with most traders leaning toward the “virus-on” side.
Once again Omicron grabbed the headlines with worries about it causing demand destruction leading the selling pressure. So far health officials have provided little information other than it’s a fast-spreading virus. Meanwhile government officials in some areas of the world have moved ahead with reimposed restrictions.
The U.S. government apparently doesn’t have any plans to limit the spread of the virus other than to encourage individuals to get vaccinated. However, the rapid spread of the Omicron variant has led some companies to pause plans to get workers back into offices.
At 20:07 GMT, March U.S. West Texas Intermediate crude oil futures are trading $70.37, down $1.38 or -1.92%. March Brent crude oil is at $73.52, down $1.40 or -1.87% and the United States Oil Fund is at $51.06, down $0.81 or -1.56%.
US Drillers Add Oil and Gas Rigs for Second Week in a Row – Baker Hughes
U.S. energy firms this week added oil and natural gas rigs for a second week in a row as demand for energy keeps growing after last year’s coronavirus demand destruction, Reuters reported.
The oil and gas rig count, an early indicator of future output, rose three to 579 in the week to December 17, its highest since April 2020, energy services firm Baker Hughes Company said in its closely followed report on Friday.
U.S. oil rigs rose four to 475 this week, their highest since April 2020, while gas rigs fell one to 104.
Goldman Sachs Says Oil Could Hit $100, Demand Might Reach ‘New Record High’ in the Next Two Years
Goldman Sachs predicts a new high in oil demand in 2022, and again in 2023. Damien Courvalin, the investment bank’s head of energy research, also said Friday that oil at $100 per barrel was a possibility.
Before you get too excited about triple-digit crude oil, remember that the investment bank raised its forecast for year-end Brent crude oil to $90 per barrel from $80, as a faster fuel demand recovery from Delta variant and Hurricane Ida’s hit to production led to tight global supplies.
But at least they’ve been consistent.
In a note dated September 26, Goldman said, “While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts.”
Goldman Analyst Damien Courvalin said, “We’ve already had record high demand before this newest variant, and you’re adding higher jet demand and the global economy is still growing,” Courvalin said in an energy outlook briefing with reporters on Friday. “You see how we will average a new record high in demand in 2022, and again, in 2023.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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