Omicron surge in Europe takes its toll on crude oil price
The price of crude oil started falling on Monday,
clearly indicating the impact on the demand by the surging Omicron across
Europe.
It is a body blow for a range of industries that had
been waiting to breathe a sigh of relief during the Christmas period, having immensley suffered almost for two years due to the pandemic.
With the Netherlands in the lockdown, judging by the
surging rate of infections and the lack of corporation from a significant section
of the populations in containing it, citing the ‘freedom’, it is only a matter
of time before the rest of the major European nations falling in line –
inevitably.
Although such a move will be politically suicidal
for some European politicians, the evolving circumstances will leave them with few
palatable options.
Although the price of crude oil showed an upward
trend, perhaps buoyed by the falling US crude inventories, the surge in
infections by the new variant of the Covid-19 has clearly dampened the positive
sentiments.
Investors and traders have come to realize that the
control of the new wave of infections is beyond the grasp of politicians – and their
optimism to the contrary.
Of course, the new wave of the pandemic will be
controlled by iron-fisted approach at some point, when the disease runs its
course – in the end. Unfortunately, our experiences in this regard during the
last two years show that the recovery time is painfully long, potentially
taking months.
On the other hand, the acrimonious activities
involving Russian and China with the west show no sign of abating. On the
contrary, they are escalating on many fronts, leaving many roadblocks on the
way to a collective economic recovery.
Crude oil markets have never been able to crawl out
of the shadows of mutual distrust that exists between major global powers; the
falling price of crude oil, even when there are indications in support of a
recovery in demand, shows the lingering anxiety
of investors – and traders.
In these circumstances, the crude oil markets are
going to suffer in the long run, before making a full recovery sometime next
year - because, the world still needs oil.
