(New York) Oil prices had their worst day in 17 months on Friday, hit hard by the discovery of a new variant of the coronavirus, which casts doubt on the trajectory of the global economy.
A barrel of West Texas Intermediate (WTI, American standard variety) for delivery in January lost 13.06%, to finish, in New York, at 68.15 dollars.
We have to go back to the crazy days of April 2020, which had seen prices go negative, to find traces of such a fall.
The WTI thus regained, in one day, its level of beginning of September, before the rise which had brought it beyond 85 dollars a barrel.
In London, a barrel of Brent North Sea for delivery in January also, yielded 11.55% Friday, to close at 72.72 dollars.
The movement was directly linked to the discovery in South Africa of a new variant of the coronavirus.
Originally called B.1.1529, it was named Omicron on Friday by the World Health Organization (WHO), which called it “worrying.”
“Even without drastic restrictions” likely to limit the spread of the virus, “people will be more careful, which will weigh on the demand” for black gold, said Michael Lynch, president of the firm Strategic Energy & Economic Research (SEER).
Several European countries and the United States on Friday suspended flights from southern Africa in an attempt to stem or slow the progress of the Omicron.
“I am surprised by the severity of this decline, because it is still too early to know what the impact will be and whether or not the vaccines will be effective,” commented the analyst.
According to Reuters and Bloomberg, the Organization of the Petroleum Exporting Countries (OPEC) and its OPEC + allies are also already planning to change their production schedule in response to the discovery of this variant.
The alliance’s monthly meeting is scheduled for Thursday.
So far, it has stuck to the schedule set in July, which plans to raise, each month, 400,000 barrels per day, the production of all the countries of the group.
But they could give it up for a month, according to sources cited by the two agencies.
“They need to put the market back on its feet,” argues Mr. Lynch, “offer support, because fear seems to rule the day. ”
OPEC could thus regain control against US President Joe Biden, who announced on Tuesday the coordinated use of the strategic reserves of several countries, including the United States, to relieve the market.
“The United States and other heavy consumers [qui ont participé à l’initiative] might have shed their cards too soon, ”according to Craig Erlam.