- Oil futures fell about 5% Monday morning as the rapid spread of the Omicron virus variant, and diminishing hopes of Biden’s economic plans roil markets
- Rising infections from Europe and the U.S. prompt restrictions on air travel and stricter curbs on mobility
- President Biden’s $2 trillion packages were derailed by surprise “no” from Senator Joe Manchin (Bloomberg)
- Goldman Sachs economists cut their U.S. economic growth forecasts
- The front of the oil curve continues to signal oversupply as January WTI trades just under the February contract
- The move into contango for the prompt-month spread is a far cry from the steep backwardation seen in late October
- WTI for January traded at nearly a $1.80/Bbl premium to February on October 31
- AEGIS notes that the January contract expires today and could be influencing the weakness of the January contract
- Even so, WTI’s 2nd month is trading at only a 24c premium to the 3rd month (February-March). Backwardation was $1.80/Bbl for these two months back in late October