Oil prices tumbled more than 3% after Moderna’s CEO cast doubt on the efficacy of Covid-19 vaccines against the Omicron coronavirus variant, spooking financial markets.
The head of drugmaker Moderna told the Financial Times that Covid-19 vaccines are unlikely to be as effective against the Omicron variant of the coronavirus as they have been against the Delta variant.
Brent crude futures fell $2.32, or 3.2%, to $71.12 a barrel at 0729 GMT after slipping to an intraday low of $70.52, the lowest since Sept. 1. U.S. West Texas Intermediate (WTI) crude futures fell $2.15, or 3.1%, to $67.80 a barrel, off a session low of $67.06, the weakest since Aug. 26.
The Moderna CEO’s comments were just a catalyst for the market which was already weak, said a Singapore oil trader who declined to be named due to company policy.
Oil plunged around 12% on Friday along with other markets on fears the heavily mutated Omicron would spark fresh lockdowns and dent global growth, hurting oil demand.
The World Health Organization said on Monday Omicron posed a very high risk of infection surges, and several countries stepped up travel curbs. It is still unclear how severe the new variant is and whether it can resist existing vaccines.
With the demand outlook under a cloud, expectations are growing that the Organization of the Petroleum Exporting countries, Russia and their allies, together called OPEC+, will put on hold plans to add 400,000 barrels per day (bpd) of supply in January.
