Oil market Review till first of January 2021

This article was prepared by Mahnaz GolMohammadian, the Office Manager of Infinity Galaxy.

Despite the near-term bullish trend in the past few weeks and verified vaccines, the new variant of coronavirus in the UK brought a negative sentiment to the market again. As we know, the new strain is up to 70% more transmissible than the original Covid-19. Countries shut the borders to Britain due to the fear of the virus spread. Stocks and commodities fell globally. VIX index showed a 16.64% increase indicating high volatility and fear of the market.

By Brexit on December 31 and new virus strain, food shortage has caused terror and chaos in Britain borders and concerns about fuel demand recovery. The fear was a bit down after WHO suggested no evidence against new vaccine ineffectiveness. There is also no evidence about the new strain being more deadly.

U.S dollar rose to represent a safe currency for the buyers, regardless of the coronavirus aid package of $892 billion approved on Monday. Lower demand and interest in the crude oil dropped the prices. WTI crude oil, which was already experiencing pressure in the $50 resistance, fell down 2.38% at $46.86 per barrel. The brent oil is now 2.18% lower at $49.81. Although we hope for a better demand in 2021, we probably should not expect oil prices over $50 soon.