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Oil Tumbles On Omicron And BBB Double Act

COMMODITIES
  • Oil futures have tumbled on fears of stricter Omicron-related restrictions and Manchin’s blocking of BBB, far outweighing a shutdown in production at Libya’s largest oil field.
  • WTI is -5.1% at $67.2, having briefly cleared the first support level of $66.62 (Dec 6 low) before retracing. Further support is seen at $65.45 (Dec 3 low) whilst initial resistance is the intraday high of $69.98.
  • Declines are somewhat front-loaded over near-term contracts but nevertheless still significant further out.
  • $55/bbl puts have been the most active strikes today for the G2 (Feb'22) contract, followed by $60/bbl puts and then closely $75/bbl calls.
  • Brent is -4.4% at $70.28, with first support at $69.24 (Dec 3 low) and plenty of room to run to the upside with initial resistance at $75.01, the 20-day EMA.
  • Gold has dipped -0.2% against this backdrop to $1794.8, eyeing up $1770.5, the base of the bull channel drawn from the Aug 9 low.

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