Optimism around the Omicron variant and its severity, prevailed at the start of the week, with US foremost infectious diseases expert, Dr Anthony Fauci saying on Tuesday that "it appears that with the cases that are seen, we are not seeing a very severe profile of disease". 
Also supportive, was the reduction of the Required Reserve Ratio (RRR) for financial institutions from the People's Bank of China's (PBPOC). The central bank will reduce the RRR by 0.5% on December 15 (to 8.4%) to "support the development of real economy and steadily bring down overall financing costs". 
US EIA STEO
Tuesday's latest monthly Short-Term Energy Outlook (STEO) from the U.S. Energy Information Administration (EIA) offered some upbeat forecasts, despite acknowledging "uncertainty about the level of energy consumption throughout the world" due the emergence of the Omicron Covis-19 variant.
The EIA report sees global consumption of petroleum and liquid fuels increasing by 3.5 million barrels/day (b/d) in 2022, to average 100.5 million b/d. For 2021, it will average 96.9 million b/d, which is a 5.1 million b/d rise from 2020. 
Risk on-mood led to a relief-rally at the start of the week, following six straight losing ones – the worst streak in around three years. Today it keeps off its highs, but the European session is supportive.
This has brought it closer to the November descending trend-line (73.80-74.21) and the EMA200 (75.50), although a break above both may require fresh catalyst. Above the EMA200, it will be able to shoot for the 80.00s region.
Sentiment seems a bit more cautious today and USOIL shows signs of exhaustion ahead of key hurdles. This can lead to a pullback towards the 200Day EMA (around 69.10), but renewed risk aversion will be needed for larger decline towards 65.58 and below.
From the economic calendar, the weekly stockpiles from the US agency are expected later in the day and China's Producer and Consumer Price Indexes tomorrow.
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Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 08 Dec 2021 http://www.pbc.gov.cn/en/3688110/3688172/4157443/4408001/index.html
Retrieved 03 Jul 2022 https://www.eia.gov/outlooks/steo/