WTI Crude Swings Between Gains And Losses

Crude oil prices have been choppier on Wednesday than the previous two days. WTI crude futures have dumped within a USD 71.00 – 72.70 range over the past few hours, swinging between gains and losses.

WTI slump back under the USD 72.00 to around USD 71.75, where it trades broadly flat during Wednesday’s trading session.
WTI continues to trade with gains of more than USD 5.0 (nearly 8.0%) and the gains versus last week’s near-USD 62.00 lows now stand at over USD 9.00 or nearly 15%.

Oil markets have been driven higher this week by hopes that the new Omicron Covid-19 variant is milder than prior variants, thus presenting less of a threat to the global economic recovery.

Headlines regarding the efficacy of vaccines has been mixed over the last 24 or so hours. Late on Tuesday, a study was released by scientists in South Africa showing that two doses of the Pfizer/BioNTech vaccine were only partially able to neutralize Omicron.

Risk appetite and crude oil markets have been choppy as a result of the conflicting stories, whilst oil markets have also taken notice of headlines in the UK suggesting that new COVID-19 curbs are on the verge of being introduced.

One of them will include the recommendation to work from home, which of course dampens the near-term outlook for demand for fuel in the UK if fewer people are travelling.

Looking ahead, oil traders will be watching the release of official weekly US inventory numbers later on Wednesday. Private weekly US inventory data showed a slightly larger than expected draw in crude oil stocks of around 3.1M barrels.