The oil prices went down sharply to a sum of $74 after fears of the new COVID variant started cropping in different parts of the world. Before that, the Brent prices managed an average of $42 per barrel in the November of 2020, while in November 2021, the barrel had an average price of $83- which was a major increase of $41 per barrel.
This did indicate a major recovery in market fundamentals along with demand. Cases of the new variant, horrifyingly, have been spreading pretty rapidly in South Africa, much faster than the previous beta and delta strains of the same virus.
Oil Prices Could See a Major Breakdown
The new variant which has seriously affected oil prices has been named the B11529 and was first identified in South Africa. The strain contains a whole host of other mutations that weren’t present in the earlier strains. The Health officials in the country then managed to get a confirmation of 22 new cases with this variant in the land, and they believe that this variant is pretty much entirely responsible for 90% of the cases that have taken place in Gauteng- the place where the virus was first identified.
This new variant possesses around 30 new mutations, which is around twice that of the delta variant. Mutations have been thought to be considerably more problematic as they can reduce the efficacy of most of the vaccines- as highlighted by the delta variant.
While there have been fears that this new variant would be affecting the oil prices, mobility indicators in most places around the world do remain robust- which signals a far more sustained transport fuel market. In the near future, most of the refinery intakes should look towards trending upward as a response to the product tightness in the near term- while implementation of lockdowns could weigh in on the run rates of the refineries.
It has been believed that the oil prices would definitely see a recovery in the next week due to a correction move.