On December 21, the U.S. WTI crude oil futures market prices fell sharply, with the settlement price of main contracts at $47.97/barrel, down $1.27. The price of Brent crude oil futures market also dropped significantly, with the settlement price of main contracts at $50.91/barrel, down $1.35.

The WTI of oil prices fell 2.6% on Monday. The main reason for the end of the recent continuous rise in oil prices was the mutation of the new coronavirus in the UK, which spread more rapidly, resulting in the tightening of restrictions in the UK and even in Europe as a whole, which led to the market’s concern about the expected recovery of fuel demand.

On December 20, Beijing time, British Prime Minister Johnson suddenly announced to raise the epidemic prevention level of London and parts of southeast England to the newly added fourth level (closed city). According to relevant knowledge, this measure is due to the variation of the virus. British officials said that the transmission capacity of the variant virus strain is 70% higher than that of the original strain. The discovery of the new strain has raised concerns in the market about a wider range of infections. As a result, after the British Prime Minister announced emergency measures, a large number of Londoners went out of the city overnight by train or road, and most parts of Britain were closed. Even Europe as a whole has tightened restrictions, and many countries have issued new travel restrictions on the UK, raising concerns about the expected slowdown in fuel demand in the market.

In addition, from the supply side, there are certain risk factors in the supply side of oil price. Previously, due to the continuous promotion of vaccines and the optimistic market, the oil price continued to soar, and the oil price has been in an upward cycle for seven consecutive weeks. The number of active oil and gas rigs in US energy companies rose for four consecutive weeks, boosted by optimism about the oil price environment. Baker Hughes, the US energy service company, reported on Friday that the number of active oil and gas rigs, the leading indicator of us future production, increased by 8 to 346, the highest since May. Shale oil production continues to increase. The superposition of OPEC + has also relaxed the restrictions on production reduction, forming a new impact on the market. Recently, people familiar with the matter disclosed that Russia proposes to further increase OPEC production by 500000 B / D in February next year, which also reflects the variables of future supply.

According to the business association, the recent epidemic situation has undergone new changes, and there is great uncertainty in market demand. In the short term, affected by European restrictive measures, oil prices may still have downward pressure. In addition, the U.S. commercial crude oil inventory data last week showed that although crude oil inventories continued to decrease, gasoline inventories continued to increase, indicating that demand growth was still very slow, and oil prices may continue to hover at the $50 level. In the medium and long term, with the promotion of vaccines and the implementation of new US fiscal stimulus policies, including the continued recovery of demand in Asia, oil prices may continue Continued to warm up.