WTI crude futures fell sharply yesterday as traders reassessed the demand outlook following recent mixed news regarding Omicron strain. Earlier studies suggested that a new variant of the Covid-19 virus results in less severe reactions in patients than previous versions. However, a recent study by a Japanese scientist found that the new variant is 4.2 times more transmissible than the delta, and has a higher chance of escaping immunity built naturally and through vaccines. Also European countries are struggling with the fourth wave of the pandemic and several nations implemented new mobility restrictions ahead of the holiday season, a vital period for the retail sector in particular. These actions together with recent EIA data weighed on sentiment this week
Nevertheless it seems that buyers manage to halt declines around major support at $71.00 which coincides with 61.8% Fibonacci retracement of the last upward wave and 200 SMA (red line).
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OIL.WTI, D1 interval. Source: xStation5
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