Oil prices fell below $70 a barrel for the first time since August – E24

On Tuesday around 14:30, North Sea oil (burning spot) fell below $70 a barrel for the first time since August 24.

A little less than half an hour later, the price of oil has rebounded somewhat, and at the time of writing it is at $70.32 a barrel.

This decline comes after concerns that the new omicron variant will spread outside the global oil markets today, especially after the statements of the President of Moderna that the vaccine is not effective against the mutation.

Louise Dixon, an analyst at Rystad Energy, wrote in Oil Today that when the first vaccines were announced to the public, the price of oil soared, doubling in less than a year, demonstrating the seriousness of important vaccine news for energy markets.

The threat is real

At the same time, the analysis indicates that “the threat to oil demand is real.”

– Dixon wrote that another wave of shutdowns could lead to losses of up to $3 million per barrel per day in the first quarter of 2022.

They also wrote that the omikron variable is not the only thing driving oil prices lower, but also the tension associated with the OPEC + meeting that begins on Thursday.

OPEC production declines in November

OPEC oil production rose by 220 thousand barrels per day in November, which is lower than the 254 thousand barrels per day previously agreed upon by the organization.

Reuters reported on Tuesday, refers to a poll conducted by the news agency.

With production going through the planned increase in production, OPEC increased its commitment to the approved production cuts to 120 percent in November from 118 percent in the previous month.

Focus on OPEC

The next question now is how the OPEC oil cartel will react to the decision of major oil consuming countries such as India, China, the United States and the United Kingdom. After repeated requests by the OPEC group to produce more oil, the President of the United States took matters into his own hands.

The United States and oil-consuming countries will release 50 million barrels of oil into the market from the Strategic Petroleum Reserves.

We will receive the decision on Thursday and the question then is whether the group will move forward with an increase of 400,000 barrels in January 2022.

The corona weakens as well

The krone is falling against both the dollar and the euro on Tuesday morning. At worst, the dollar was 9.11 kroner, the most expensive since November last year.

One euro has a maximum price of 10.31 kroner, the highest since September 8.

At 15:30, the krone has marginally recovered, and at the time of writing the dollar costs 9.05 kroner, and the euro 10.28 kroner.