Oil Drops For The Sixth Week Straight

Oil fell for the sixth straight week in the longest weekly decline since 2018, as Omicron variants rocked the market and OPEC + continued to increase supply. West Texas Intermediate Crude Oil futures fell 2.8% this week. The surge in Omicron variants has raised concerns for investors as a potential drop in demand may occur, since the United States reports cases in at least six states. Covid 19 infections in South Africa have nearly quadrupled since Tuesday. Meanwhile, OPEC and its allies have decided to bring 400,000 barrels of crude oil a day to the global market in January, eventually succumbing to consumer pressure. 

Crude oil plummeted from late October as major consuming countries tried to utilize their reserves and new variants before the virus emerged. Lower-than-expected US labor data put the more restrictive Federal Reserve in a tight position on Friday. Meanwhile, the sharp rise in volatility has led oil traders to exit, with open positions for major oil futures contracts dropping to their lowest levels in several years. OPEC + has decided to continue supplying barrels to the market, but the group has basically set a minimum rate by offering the option to reschedule with a sudden notice. 

Prior to this week's meeting, ministers said they were concerned about the impact of Omicron on oil demand, but had a hard time understanding how serious the new variant would be.