Oil Slides on Global Surplus as Omicron Stokes Demand Fears - Bloomberg

Oil Slides on Global Surplus as Omicron Stokes Demand Fears - Bloomberg

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West Texas Intermediate for January delivery fell 56 cents to settle at $70.73 a barrel in New York Brent for February settlement dropped fell 69 cents to settle at $73.70 a barrel Oil fell as the International Energy Agency said the global oil market has returned to surplus, while some countries tightened restrictions in an effort to tame the omicron variant’s spread. Futures in New York closed down 0.8% on Tuesday. The IEA said rebounding output has created an oversupply that’s likely to swell further next year. Italy will require travelers from other European Union countries to provide a negative Covid-19 test, and Scotland is urging no more than three households to mix. As the market digests the near-term effects of omicron on oil demand, Brent’s so-called prompt spread flipped into contango for the first time since March, excluding contract expiration days. The bearish market structure, in which the contract for immediate delivery is trading at a discount to oil for future delivery, indicates plentiful supply over the short term.