Omicron News Brings Volatile Trading Swings
December 21, 2021
Yesterday was a volatile day of trading in the energy markets. Price fell almost 7% during the day hitting the lowest level in the past three weeks. The increasing cases of the Omicron variant have made traders nervous that new restrictions to ease the spread will slow fuel demand. Prices did rebound off the lows and are trading higher to start out today as the volatility continues.
The energy market continues to price itself relevant to the outlook for the economy. There are still some big banks that have a very positive outlook for the US economy and as a result, have high price targets for crude oil like $100 and $125.
Now that it appears President Joe Biden’s “Build Back Better” plan will not get voted on until next year some economist have adjusted their GDP forecast. Goldman Sachs lowered its GDP growth forecast for 2022 as did Mark Zandi, chief economist for Moody’s Analytics.
Economists projected earlier this month that growth would slow next year as the support provided by earlier spending programs faded and the Federal Reserve reduced its monetary policy accommodation in the face of higher inflation.
The Federal Highway Administration said US motorists drove 7.1% more miles in October over 2020 levels as people return to offices and leisure trips, but the distance is off slightly from pre-pandemic levels.