Oil prices opened the new year near multi-year highs. However, concerns over Omicron's COVID-19 prompted economists to cut their forecasts for oil prices this year.
World crude oil prices were relatively stable in the early trading week (03/January), starting 2022 near multi-year highs. At the time of this news release, Brent oil was at $78,342 per barrel, while WTI (West Texas Intermediate) was trading at around $75.78 per barrel.
Throughout 2021, oil prices made an impressive performance by posting an increase of more than 50 percent. The surge in prices last year was inseparable from the global economic recovery after the Corona pandemic. However, the rally in oil prices has stalled slightly in the last two months due to re-emerging concerns over the spread of the Omicron COVID-19.
The White House's health adviser, Dr Anthony Fauci, has even again warned Americans to prepare for an explosion in COVID-19 cases in the weeks ahead. Fauci's warning is quite reasonable, considering the many Americans who travel during the Christmas and New Year holidays. Plus, schools will reopen after winter break.
Analysts Cut Oil Price Projections for 2022
The emergence of Omicron, the latest variant of Covid-19 which is said to be immune to vaccines, still leaves concerns among market participants. Although the health authorities of several countries have confirmed that this variant is no more dangerous than the Delta variant, the nature of its relatively fast spread has sparked new concerns.
A number of oil analysts also decided to downgrade the outlook for oil prices for 2022. A survey of 35 economists and analysts predicts the average price of Brent oil will fall to $73.57 per barrel, lower than November's consensus of $75.33 per barrel. A downward revision was also applied to the outlook for WTI oil, which was from $73.31 per barrel to $71.38 per barrel.
Investors' attention in the near future will be focused on the OPEC+ meeting on January 4 tomorrow. Many parties estimate that the organization will maintain the production policy achieved in July 2021, namely by gradually increasing output by 400 thousand barrels per day every month.
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