Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Crude Oil Drops Ahead of ’OPEC+’ Meeting after Current Vaccine Effectiveness Questioned

Crude Oil Drops Ahead of ’OPEC+’ Meeting after Current Vaccine Effectiveness Questioned

Richard Snow, Analyst
What's on this page

Brent Crude Oil Analysis:

  • Moderna CEO raises questions over current vaccines efficacy, sends crude lower
  • OPEC with lots to consider ahead of meeting: effects of Omicron on travel and oil demand, plus new supply side additions from Biden and co.
  • Key technical support will be tested this week

Brent Crude Oil Dives More Than 3% on Moderna CEO’s Comments

Brent crude oil continues to reveal just how sensitive the energy market has become to news headlines as crude dropped over 3% today and continues to trade down for the day (at the time of writing). The biggest driver behind the latest move can reasonable be attributed to comments earlier today from Moderna CEO Stephane Bancel, whereby he mentioned that existing vaccines may be less effective against the Omicron variant.

Bancel’s comments seemed to overpower the rather optimistic statement by his chief medical officer Paul Burton, two days earlier, when he expressed that Omicron vaccines could be made available in early 2022.

Oil Forecast
Oil Forecast
Recommended by Richard Snow
Get Your Free Oil Forecast
Get My Guide

OPEC+ to Consider: Effects of Omicron on Travel Bans, Lockdown Threats and SPR Releases

Since yesterday’s report, multiple cases of Omicron have been detected in Europe while Germany and Austria struggle to contain the fourth wave of Covid infections, causing Austria to undergo a 10 day lockdown which could be extended to 20 days if needed.

Meanwhile, German leaders met earlier today to discuss the possibility of playing Bundesliga matches behind closed doors with the final decision on this reserved for Thursday. While this is far from a lockdown, if efforts prove ineffective, harsher measures may be considered – potentially impacting travel.

OPEC, Russia and its allies - known as ‘OPEC+’ - are set to meet this Thursday to discuss the effects of Omicron amidst the backdrop of increased oil supply. The additional supply emanates from Biden’s coordinated efforts with a handful of Asian countries to release strategic petroleum reserves (SPR) in an attempt to lower high oil prices. Bearing all of this in mind, OPEC+ may well decide against the usual supply increase of 400.000 barrels per day (bpd) or reduce the amount of increased supply in order to account for current lower prices and increased supply.

Crude Oil Technical Analysis

On the technical front, crude has swayed drastically over the last few trading sessions with Monday suggesting Friday was an overreaction while today’s move looks to justify Friday’s sell-off. Recent price action has broken below the $71.00 level once more and now approaches the psychological level of $70.00 flat. Longer term indications of a potential bearish reversal are clear to see on the weekly chart (still to come).

Brent Crude Oil Daily Chart

Brent Crude Daily Chart

Chart prepared by Richard Snow, IG

How to Trade Oil
How to Trade Oil
Recommended by Richard Snow
How to Trade Oil
Get My Guide

The weekly chart shows the rather steep incline we have witnessed as crude made a rather fast recovery from the global lockdown lows of 2020. However, the $71.00 level can be highlighted once more as it has provided numerous inflection points over the last 12 months, both as resistance and support and remains key as the ‘canary in the coalmine’ for further bearish price action.

The $71 level becomes even more significant as it currently coincides with the long term ascending trendline where a break and hold on the weekly candle may signal the early signs of a long term bearish reversal. This being said, a more conservative level to watch out for would be the $64.50 level when assessing a major reversal but $71.00 remains key for now.

Brent Crude Weekly Chart Showing Crucial LT Trendline

Brent Crude Oil Weekly Chart

Chart prepared by Richard Snow, IG

--- Written by Richard Snow for

Contact and follow Richard on Twitter: @RichardSnowFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.