Brent oil price may fall by 10% due to new risks of COVID

08:37, 24 December 2020
Brent oil price may fall by 10% due to new risks of COVID Photo: Sergey Lantyukhov/NEWS.RU

The price of Brent crude oil is declining amid the news of a new contagious strain of coronavirus that could cause a new lockdown, TASS reports referring to Ole Hansen, head of the commodity strategy at Saxo Bank.

This can lead to a suspension of the accumulated growth of prices and even roll them back to $45 per barrel soon, he noted.

The optimism about vaccines and monetary stimulus, which drove the dollar down, was a key factor in the rampant speculation in the markets, including the oil one. And while oil prices will continue to rise in 2021, the short-term outlook for oil has worsened, Hansen said.

He added that after hitting $52 a barrel, oil appears to have reached its peak value, as significant drivers of price growth, such as steadily growing demand, are missing.

There is a risk that Brent will rebound by 10%, to $46 a barrel, before finding support, he noted.

Hansen added that the market could be supported by news of the start of mass vaccination against coronavirus infection.

Oil prices collapsed after the OPEC+ countries failed to agree on March 6 to change the agreement's parameters to reduce oil production or extend it. From April 1, OPEC introduced restrictions on oil production. reported earlier that oil and gas exports from Russia to Europe might decline by 2040.