ISLAMABAD: Crude oil prices for two major benchmarks went down up to 2.77 percent for the fourth consecutive week after rallying for seven straight weeks in the international market.
According to details, Brent, the international benchmark for two-thirds of the world’s oil, shed 2.38 percent during the week to reach $69.88 from $71.59 a barrel. Similarly, the US West Texas Intermediate (WTI) reached $66.26 from $68.15, down by 2.77 percent during the week.
During the week, the price for Opec Basket decreased to $70.03 from $76.09 with a 7.96 percent decrease, Arab Light price decreased 10.92 percent from $82.94 to $80.38 a barrel, while the price of Russian Sokol went down by 11.29 percent to reach $72.10 from $81.28.
Global crude oil started the week on a positive note and recouped some of previous week’s losses on Monday by surging over 6 percent. However, crude prices fell over 3 percent on Tuesday amid concerns over omicron coronavirus variant and its impact on oil demand.
Crude oil prices surged around 4 percent on Wednesday ahead of the OPEC+ meeting on expectation of suspension of proposed output increases on the back of the omicron coronavirus variant. Similarly, the oil prices surged over one percent on Thursday.
On Friday, oil prices surged around three percent after OPEC+ hinted at supply cuts if Omicron disrupts demand during the intra-day trading. However, they lost all gains and settled lower.
Crude oil futures posted sharp losses as the World Health Organisation said the new omicron variant poses a high global risk, and a major pharmaceuticals company said currently available Covid-19 vaccines are less effective against it. Oil prices posted losses once again and almost completely eliminated the partial gains of the previous day, bringing current levels close to the November 26 close.
The main trigger for the more bearish sentiment was comments made by Moderna’s chief regarding current vaccines’ efficacy being limited against the omicron variant, adding that development and production of a more effective version could take months.
The Organisation of the Petroleum Exporting Countries (Opec) and key allies, known as Opec+, on Thursday decided to stick with plans to increase supply in January by 0.4 million barrels per day despite a recent plunge in prices driven by fears of a new glut. The Opec+ said it would continue to take stock of the pandemic, monitor the oil market closely, and stand ready to make “immediate adjustments if required.”
It has scheduled its next meeting for January 4. The meeting reaffirmed the continued commitment of the participating countries in the Declaration of Cooperation (DoC) to ensure a stable and balanced oil market. Analysts had been expecting OPEC+ to pause an output increase of 400,000 barrels per day scheduled for January given the recent price fall and uncertainty over the trajectory of the pandemic and its impact on oil demand.