Crude oil trading reminder: Epidemic concerns have rebounded, be wary of the resumption of the decline in oil prices, and pay attention to the progress of Iranian nuclear negotiations

At the beginning of the Asian market on December 10, U.
S.
oil was now at $70.
49 per barrel; Oil prices fell nearly 3 percent on Thursday as the rapid spread of the new coronavirus variant Omicron revived fears that more containment restrictions could hit demand for crude oil, diluting optimistic expectations
about the efficacy of vaccines.

At the beginning of the Asian market on Friday (December 10), U.
S.
oil is now at $70.
49 / barrel; Oil prices fell nearly 3 percent on Thursday as the rapid spread of the new coronavirus variant Omicron revived fears that more containment restrictions could hit demand for crude oil, diluting optimistic expectations
about the efficacy of vaccines.

During the day, we will focus on the US unseasonally adjusted CPI index for November, the preliminary value of the University of Michigan consumer confidence index in December, and the total number of
rigs in the United States for the week ended December 10 at 2:00 on Saturday.

[Omicron strain restrictions tightened to hit risk sentiment]

British Prime Minister Boris Johnson imposed tighter pandemic restrictions in England on Wednesday, ordering people to work from home, wear masks in public places and use vaccine passes
.
Johnson said Omicron was spreading rapidly and he had no choice but to turn to "Plan B"
while speeding up booster shots.

Denmark also plans to introduce new restrictions, including the closure of restaurants, bars and schools
.

Rebecca Babin, senior energy trader at CIBC Private Wealth Management, said: "The market is still in calibration mode around the pandemic," initially pricing in the worst-case scenario for Omicron, but then "underestimating" how the government would respond
.

John Doyle, vice president of trading at foreign exchange payments company Tempus, said: "We are seeing some caution in the market because of Omicron
.
I think fears that things will be worse than Delta's have subsided, but news about how easily the new variant spreads has led the market to be more cautious
.
”

[S&P 500 and NASDAQ both fall as Omicron aggravates economic worries]

U.
S.
stocks fell on Thursday as fears that measures against Omicron could be detrimental to economic growth prospects diluted optimistic expectations
about the efficacy of vaccines.
Both the S&P 500 and the Nasdaq 100 retreated, ending a three-day winning
streak.
The consumer discretionary and real estate sectors led the decline, while the CBOE volatility index edged up towards 22
.

Fears are growing that measures will hurt the economic recovery as the cost of containment increases
.
Bloomberg Economic Research, for example, estimates that the UK's new work-from-home proposal could cost the country's economy £2 billion ($2.
6 billion)
a month.
Another study found that the Omicron variant was 4.
2 times more transmissible early than the Delta variant
.

Jim Reid, strategist at Deutsche Bank, and others said, "From a health perspective, even if it turns out that Omicron is indeed less severe, as the initial indications so far indicate, but the higher transmissibility would still offset the effect," which could mean that more people will be hospitalized, "even if the proportion of severe disease is lower
.
" ”

[S&P still expects oil demand to grow next year]

S&P said oil demand will grow
next year, even as the world continues to deal with new variants of the coronavirus.
Shin Kim, head of supply and production at S&P Global Platts, said in the company's 2022 Energy Outlook report that a large part of the consumption growth in 2022 will come from jet fuel, as well as rising demand for other petroleum products such as automotive
fuels.

"Oil demand growth is on solid footing," she said, and demand growth is expected to be between
3 million and 6.
4 million barrels per day next year.

Still, the tone of the energy market will depend on the pace of supply growth, with production needing to rebound to meet demand
after two years of shrinking inventories.
Iran's resumption of supplies will have the biggest impact
.

"If we don't think about Iran and there are major supply disruptions elsewhere, that means the real question will be whether we're going to test $100/b oil prices," Kim said, "Right now the market is entering a period of seasonal oil price weakness, but oil prices should rebound
after May as rising demand leads to tight supply.
" Platts expects crude oil prices to return to $80 a barrel around mid-2022
.

[U.
S.
warns Iran of new sanctions if negotiations fail]

With negotiations on the Iran nuclear deal at an impasse, the Biden administration warned Thursday that the United States is preparing a new round of sanctions on Iran and will urge other countries to comply with existing sanctions
.

White House press secretary Jen Psaki told reporters that President Joe Biden "has asked his team to prepare
for diplomatic failure.
" If negotiations to revive the 2015 nuclear deal in Vienna fail, "we will have no choice but to take other measures" to limit Iran's revenues
.

Psaki's comments come as the U.
S.
government announced that Treasury and State Department officials would travel to the UAE to discuss compliance with sanctions
.
The UAE is buying Iranian oil and some of the country's banks are also facilitating Iranian business activities, in clear violation of U.
S.
sanctions
.

In addition, members of both parties in the US House of Representatives sent a letter to President Joe Biden saying that the government should not ban crude oil exports
.
The White House is considering how to address high gasoline prices, with reinstating the ban on crude exports lifted in 2015 among options
.
Gasoline prices hovered near seven-year highs, ringing political alarm bells for the White House
.

The letter, spearheaded by Representative Henry Cuellar, Democrat of Texas, wrote that the move would be counterproductive and echoed the views of
many analysts.
Proposals to reinstate the ban on crude oil exports to lower gasoline prices are misleading, given that many U.
S.
refineries process international crude oil, which could rise
.

[U.
S.
initial jobless claims fell to 52-year low last week

U.
S.
initial jobless claims fell last week to their lowest level since 1969, highlighting the difficulty
of seasonally adjusting the data.
Initial jobless claims fell by 43,000 from the previous week to 184,000
in the week ended Dec.
4, Labor Department data showed on Thursday.
The median estimate of economists surveyed by Bloomberg was 220,000.

The data had fallen sharply in the previous two weeks, which many economists attributed to seasonal fluctuations around the holiday that made it difficult to adjust
.
Unadjusted initial jobless claims increased by about 64,000.

As Americans return to work and employers struggle to retain employees, jobless claims have declined this year
.
Rising prices and the coronavirus pandemic continue to make it more difficult
to run businesses and recruit activities.
Nonfarm payrolls rose at the slowest pace this year last month, amid widespread labor shortages
.
The four-week average of initial jobless claims fell to 218,750, the lowest level
since March last year.
Continuing jobless claims rose to 1.
99 million in the week ended November 27, up 38,000
month-on-month.

Overall, under the continuous spread of the Omicron strain, some countries increased epidemic prevention restrictions, offsetting the previous optimistic expectations for vaccines, which revived concerns about the Omicron strain, and oil prices were strong; Near the weekend, pay attention to Omicron-related news and reports
related to the Iranian nuclear negotiations.

At 7:58 Beijing time, U.
S.
crude oil is now at $70.
49 per barrel
.