🔽 Oil plunges below Friday's lows on fears that vaccines are ineffective against Omicron
The Chief Executive Officer of Moderna said during today's Asian session that it is probable that currently available vaccines will turn ineffective against a new coronavirus variant - Omicron. Earlier comments from Pfizer CEO suggested that it will take around 2 weeks to assess whether the current vaccine will be useful in combating new variants. There is a lot of uncertainty over Omicron. Almost everybody agrees that it is more highly transmissible than the previous variant. However, there are some disagreements on severity with some researchers saying that it seems to cause only mild symptoms.
However, if it turns out to be the opposite - Omicron to be more severe - there is a high risk of new restrictions being imposed that will limit mobility. In such a scenario oil demand may plummet and halt post-pandemic demand recovery. Data from Austria, where full lockdown was imposed, shows that mobility in the country dropped below pre-pandemic levels.
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Oil continues to drop and briefly traded below Friday's lows. Price seems to be supported by the 78.6% retracement of a recent upward impulse. Nominal range of the largest correction in the ongoing upward impulse has been broken. However, price still did not exceed the relative range of correction from Autumn 2020 - 24%. Should history repeat itself, a 24% correction would push oil down to the $64.75 area. Source: xStation5
