Title: Oil falls 3% on jitters over vaccine efficacy

Nov 30, 2021 06:41AM ET

By: AnalysisWatch

Oil prices fell nearly 3% on Tuesday after the CEO of Moderna expressed reservations about the efficacy of COVID-19 vaccines against the Omicron variant of the coronavirus, jolting financial markets and raising concerns about oil demand.

The head of drugmaker Moderna told the Financial Times that the COVID-19 vaccines against the Omicron variant of the coronavirus are unlikely to be as effective as against the Delta variant.

Brent crude futures fell $2.15, or 2.9 percent, to $71.29 per barrel at 1123 GMT, after falling to an intraday low of $70.52 on Sept. 1.

WTI crude futures in the United States fell $1.83, or 2.6 percent, to $68.12 per barrel after hitting a one-day low of $67.06, the lowest since Aug. 26.

According to prepared remarks, Fed Chairman Jerome Powell will tell US lawmakers later in the day that the variation could threaten the economic recovery.

Oil prices plunged about 12% on Friday, along with other markets, on fears that the heavily mutated Omicron variant could trigger new shutdowns and hurt global oil demand. It is still unclear how severe the new variant is.

With the demand outlook weakening, expectations are growing that the Organisation of Petroleum Exporting Countries, Russia and their allies, collectively known as OPEC+, will shelve plans to increase output by 400,000 barrels per day (bpd) in January.

Pressure had already been building within OPEC+, which was due to meet on December 2 to review its supply plan after the United States and other major oil-consuming nations released emergency reserves last week to counter rising prices.

However, Citi analysts expect OPEC+ to continue adding barrels in January.