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The front-month futures price for Brent crude oil decreased by $9.50 per barrel, or nearly 12%, on November 26 after the World Health Organization designated the SARS-CoV-2 Omicron variant as a variant of concern. Daily Brent crude oil prices have fallen by at least 10% on only 8 days since 2000.

The front-month futures price is the most actively traded futures contract for Brent crude oil on the Intercontinental Exchange. For the Brent crude oil front-month futures contract, daily prices typically change by less than 2%. In the 5,629 trading days since the start of 2000, Brent crude oil prices remained within 2% of the previous day’s value 72% of the time. This year, before the November 26 price drop, the most the Brent crude oil price decreased in a single day was 6.9%, on March 18.

The November 26 price decline likely reflected market expectations of lower global petroleum consumption in the coming months as a result of the Omicron variant, but other factors could have affected price changes on that day. Friday, November 26 was the day after Thanksgiving and near the end of the calendar month, which is when the front-month Brent futures contract expires. Significant news affecting global petroleum markets, announced at a time when market participants close and open several financial positions, may also have contributed to crude oil price volatility on that day.

Principal contributors: Jimmy Troderman, Jeff Barron