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Oil prices ended lower on Tuesday, following the publication of new estimates from the International Energy Agency (IEA) that expects lower demand for crude due to the spread of the Omicron variant of the coronavirus.
The barrel of Brent North Sea for delivery in February closed at drop from 0.92% to 73.70 dollars in London.
While in New York the barrel of WTI for delivery in January ended at $ 70.73, 0.78% below Monday’s close.
For Michael Lynch, president of the Strategic Energy & Economic Research (SEER) consultancy, the market was sustained by the reduction in the IEA’s world demand forecasts.
The agency expects an increase in demand of 5.4 million barrels per day (mbd) on average for 2021 and 3.3 mbd for 2022, 100,000 barrels less than estimated in November.
This downward difference is due to an “increase in new cases of coronavirus” that should slow down the reestablishment of global demand for crude oil, according to its report published on Friday.
“It shows in volume what Ómicron is going to cost us,” summarized Michael Lynch, after OPEC maintained its global demand forecasts for 2021 and 2022 on Monday.
The IEA even pointed out that supply should exceed demand starting in December, with production increasing from the United States and the OPEC + countries (OPEC and its allies). Analysts expected this to happen in 2022.
“That means that reserves will start to increase from now on,” summarized the analyst. “That gives people confidence that prices will go down in the coming months.”
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