Sumary of Crude Oil Price Plummets as New Variant Triggers Risk-Off Sentiment:
- BRENT CRUDE OIL (LCOc1) ANALYSISSouth African variant adds to crude oil price woes.
- CRUDE OIL FUNDAMENTAL BACKDROPCOVID-19 FEARS HAMPER OIL DEMAND FORECASTSThe new COVID-19 variant has plagued financial markets on Friday causing mayhem with broad-based losses throughout most asset classes.
- Brent crude was roughly 6% down on the day (at the time of writing) due to contagion concerns around economic growth should the virus become a systemic risk.
- Demand forecasts may be revised lower should the new strain increase fourth wave complexities and further downward pressure on crude oil prices.
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- U.S. TAPS INTO STRATEGIC RESERVES Earlier this week the U.S. declared the release of 50MMbbls of crude oil while other countries have pledged to take part in a synchronized release of varying quantities.
- The release will cause previously unexpected supply to flood the market in hopes to restrain climbing crude oil prices which has been represented in both WTI and brent price action.
- NEXT WEEK’S CHINESE PMI KEY FOR CRUDE OIL Chinese PMI data has been steadily declining MoM with October hitting yearly lows.