This Is What the Market Will Now Focus On

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What the market will now be focusing on is mostly the gravity of the pandemic’s next wave.

That’s according to Rystad Energy’s senior oil market analyst Louise Dickson, who made the statement in a comment sent to Rigzone on Monday.

“With supply set to trickle back at an incremental pace, the market turns back to demand signals for the next impetus,” Dickson said.

“With the market back taking cues from demand, any new restrictions have downward implications for oil consumption, and will be perceived as bearish for trading,” the Rystad Energy representative added.

“The decision to re-lockdown countries is not taken lightly, given the political unpopularity it carries, but as hospitals are again overwhelmed with cases, governments are taking drastic measures that imply very real downside risk for not only oil demand, but economic recovery,” Dickson continued.

In the comment, Dickson highlighted that Germany recently joined the chorus on calling for tighter restrictions “while Europe grapples with a fourth wave of Covid-19 cases”.

“If a new wave of lockdowns are enacted in Europe, oil prices will not be spared during the remainder of the flu season in the North Hemisphere,” Dickson said.

“As Europe, and in particular Eastern Europe, struggles to halt the spread of Covid-19, the risk of lockdown-like measures looms large,” Dickson added.

Europe Covid-19 cases have risen for the last eight consecutive weeks and Europe Covid-19 deaths have risen for the last 10 consecutive weeks, according to the World Health Organization (WHO). Global Covid-19 cases have risen for the last five consecutive weeks and global Covid-19 deaths have risen in the last four out of five weeks, WHO data shows.

As of November 22, 6.10pm CET, there have been 256.9 million cases of Covid-19 globally, with 5.1 million deaths, according to the latest WHO figures. A total of 7.4 billion vaccine doses have been administered.

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