At 7 week low oil – Losses over 4% per week

At the lowest level of the last seven weeks, the oil closed on Friday, recording losses for the fourth week in a row, the biggest negative series in almost 20 months. Oil prices came under pressure today as the new lockdown in Austria rekindled concerns about demand.

The Austrian government announced today that the country will enter a 10-day lockdown which could be extended up to 20 days, in order to reduce the number of new cases of COVID-19 galloping in recent days. Earlier this week, Austria became the first European country to impose restrictions on the movement of the unvaccinated population. The vaccination rate in Austria is one of the lowest in Europe, at around 65%.

Austria and Germany set a record in cases this week, with the German health minister talking today about a state of emergency, without ruling out the possibility of imposing local lockdowns to reduce infections.

The return of lockdowns in Europe threatens to derail the fragile economic recovery that followed the 2020 crisis, severely affecting demand.

“The investment climate is negative as the resumption of the lockdown in Austria has reminded investors that coronavirus waves could still disrupt the global economy,” said Colin Cieszynski, a senior SIA Wealth Management executive.

Against this background, the December delivery WTI fell 3.7% or $ 2.97 to $ 76.10 a barrel. This contract expires today with the completion of the transactions. The January delivery of WTI, the most active contract, lost almost 3.2% or $ 2.47 to $ 75.94 a barrel.

Brent crude for January delivery fell 2.9 percent, or $ 2.35, to $ 78.89 a barrel.

It is noted that the American crude closed at the lowest level since October 1. Meanwhile, on a weekly basis, US crude for December delivery fell 5.8%, according to Dow Jones Market data.

Brent, on the other hand, closed at its lowest level since September 30, falling 4% on a weekly basis.

Both contracts fell for the fourth week in a row, to the biggest negative streak since March 2020.

“There have certainly been a number of fundamental downturns in the energy market over the past two weeks, including the debate over the coordinated release of strategic oil stocks among major oil consumers and rising fears over the coronavirus,” Europe said in a statement. executive of Sevens Report Research.

“Oil has fallen this week as demand forecasts have deteriorated, OPEC and the IEA have issued oversupply warnings in the coming months and the United States has sought to coordinate a strategic stock release with China and other countries,” he said. Craig Erlam, Senior Market Analyst at OANDA.