Crude Oil Climbs as Omicron Fears Subside

December 07, 2021 12:00

Over the last week or so, the emergence of new Covid-19 variant Omicron has caused widespread volatility in the financial markets.  

Nowhere has this been more evident than with crude oil, which has seen sharp falls amidst concerns over the efficacy of existing vaccines against the variant, and fears of a reintroduction of restrictions by governments. 

The World Health Organisation’s decision to designate Omicron as a variant of concern caused Brent crude prices to plunge more than 14% in just over a week. 

However, over the weekend, reports from South Africa stated that, so far, Omicron cases had presented only mild symptoms. Furthermore, top US health official Dr Anthony Fauci also stated on the weekend that the early data regarding the new variant was ‘encouraging’. 

This ray of hope has breathed fresh confidence into the markets this week and suggested that the worst-case scenario, which had already been factored into oil prices, may not materialise after all. 

The weekend also saw indirect talks stall between the US and Iran regarding the reinstatement of the Iran nuclear deal. Whilst the negotiations could still be fruitful, a delayed resolution will further push back the return of Iranian crude. 

Yesterday, as a result of both of these factors, Brent crude prices recovered more than 5% and they have continued rising on Tuesday morning.  

While the current news is positive for crude oil, last week’s sell-off serves as a reminder that the pandemic is not quite over and that oil prices will remain especially vulnerable to any new developments.

Depicted: Admirals MetaTrader 5 – Brent Crude Oil H1 Chart. Date Range: 15 November 2021 – 7 December 2021. Date Captured: 7 December 2021. Past performance is not a reliable indicator of future results. 

Five-year evolution in price:

Depicted: Admirals MetaTrader 5 – Brent Crude Oil Weekly Chart. Date Range: 24 May 2015 - 7 December 2021. Date Captured: 7 December 2021. Past performance is not a reliable indicator of future results. 


Trade Commodity CFDs with Admirals 

With a Trade.MT5 account from Admirals, you can trade Contracts for Difference (CFDs) on Brent crude, WTI, gold, silver and many other commodities! CFDs allow traders to attempt to profit from both rising and falling prices, whilst also benefiting from the use of leverage! Click the banner below to open an account today: 


The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following: 

  • This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research. 
  • Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content. 
  • With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest. 
  • The Analysis is prepared by an independent analyst, Roberto Rojas (analyst), (hereinafter “Author”) based on their personal estimations. 
  • Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. 
  • Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed. 
  • Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
Roberto Rivero
Roberto Rivero Financial Writer, Admirals, London

Roberto spent 11 years designing trading and decision-making systems for traders and fund managers and a further 13 years at S&P, working with professional investors. He has a BSc in Economics and an MBA and has been an active investor since the mid-1990s