Covid variants could slow the reopening
This is the latest chart of covid deaths in Brazil. As you can see, it’s an utter calamity with 1200 people dying per day and 331,000 dead overall.
If it were Brazil alone though, the oil market surely wouldn’t care. The problem is that the Brazilian variant appears to be particularly nasty, with some estimates saying it’s 2.5x more-transmissible and much more deadly, particularly among younger people.
It, along with other variants, are causing another wave in the virus that’s causing wide shutdowns. The US and UK are likely to remain immune because of higher vaccination rates, but it will curb global activity and driving. Even in the US, though, the CDC was just out warning that US cases are up 7% week-over-week.
Combine less driving with a surprise increase in OPEC+ supply and the oil market is having a tough day. WTI is down $2.17 to $59.26.
Watch for stops if last week’s lows near $58.80 break.