Oil prices have come under pressure as some European countries are starting to tighten restrictions.
Naturally, that does not provide optimism in the oil sector, where the players still remember last year's restrictions.
And although experts are of the opinion that no economy can afford another lockdown, concerns remain.
In parallel, the Federal Reserve, which is fighting the highest inflation rate in four decades, will announce an aggressive approach. That move is considered to be risky for stock markets, which have been boosted by Fed stimulus for much of the pandemic. However, rising inflation really needs to be contained.
At the same time, the oil sell-off that began among fund managers last month is slowing as sales fell to 19 million in the first week of December. That is very little compared to the 131 million sales the week before.
According to John Kemp, the situation with oil right now is such that funds can start buying again. He noted that Brent positions were cut in half to about 154 million barrels, and the bullish to bearish ratio fell to 2.7: 1. This was a good time for new purchases, but only if Omicron does not turn the markets around again. That is only for the short term, although it looks like investor attitude towards the long-term outlook have changed as well.
Just recently, a recent survey from Bloomberg indicated that 2% of respondents believe that oil demand will peak by 2025, while less than 40% believe it will peak by 2030. A third said oil demand would peak between 2025 and 2030, while another third said peak demand will occur after 2030.
These results may not be particularly interesting, but in context, things change. The above numbers compare to a fifth of respondents expecting a peak in oil demand by February 2021 in a 2019 survey. In the same poll, a third believed that oil demand would peak by 2025. In even earlier studies, most expected demand to peak by 2030.
In other words, while the near-term outlook for oil is, as usual, clouded by uncertainty, exacerbated by the latest wave of pandemic, the long-term outlook appears to be at least stable.
OPEC also said recently that Omicron will have a moderate to short-term impact on oil markets, so it maintained its outlook for demand growth.
