The decline in prices for Brent crude on November 26 was one of the largest in recent years
A source: US Energy Information Administration chart based on data from Intercontinental Exchange and Bloomberg.
Brent crude futures for the coming month fell $ 9.50 a barrel, or nearly 12%, on Nov. 26 after the World Health Organization identified Omicron’s SARS-CoV-2 option as an option of concern. Daily Brent crude prices have dropped by at least 10% in just 8 days since 2000.
Monthly futures price is the most actively traded Brent oil futures contract on the Intercontinental Exchange. For near-date Brent crude oil futures, daily prices typically fluctuate less than 2%. In the 5,629 trading days since the beginning of 2000, Brent crude prices have remained within 2% of the previous day’s 72% of the time. This year, before prices fell on November 26, the largest single day decline in Brent crude oil was 6.9% on March 18.
The drop in prices on November 26 likely reflected market expectations of a decline in global oil consumption in the coming months as a result of the Omicron option, but other factors could have influenced the price change that day. Friday, November 26, was the day after Thanksgiving and towards the end of the calendar month when the first month Brent oil futures contract expired. Important news affecting global oil markets, announced at a time when market participants were closing and opening multiple financial positions, could also have contributed to the volatility in crude oil prices that day.
A source: US Energy Information Administration chart based on data from Intercontinental Exchange and Bloomberg
Main participants: Jimmy Troderman, Jeff Barron