Oil prices rebound after Omicron-related sell-off

Yahoo Finance Live panelists discuss oil prices after a COVID-19 outbreak, Omicron variant discovery, and comments by Fed Chair Powell.

Video Transcript

JULIE HYMAN: Speaking of another area of acute sensitivity right now, let's talk oil prices, shall we, for a moment? And Soz, I know you're digging into a note this morning by the folks over at Goldman Sachs, who say the movement in oil had gone too far to the downside. Right now, we're seeing a trade just under $68 a barrel. So we're covering a little bit this morning. But they've got some strong words as to the move that we have seen in oil.

BRIAN SOZZI: Yeah. In reading this one from Damien Courvalin, who leads the oil coverage there at Goldman Sachs, I definitely dropped a WTF in my head here. And I wrote a piece, now on the Yahoo Finance home page, detailing what this note said. But the high level points here-- you have oil prices down about 12% from November 24. Our very own Jared Blikre noted midday yesterday, you had oil down about 23% from its recent high.

And Goldman is essentially saying here this morning, guys, this sell-off looks overdone. They're staying bullish on the oil outlook for next year, given tight supply and demand. But why have you seen prices come back so much? Obviously, of course, lots of concerns about the COVID variant and how it might depress global travel. You've seen a lot of the travel stocks really hit here.

But Courvalin noting-- one takeaway here, quote, "Pricing at this level is pricing in not a single plane flying around the world for three months." So he's trying to make the point that the price for oil WTI had just come down too far, too fast and you may see some buyers step in here.

JULIE HYMAN: Um, yes. And they are stepping in a little bit this morning. We'll see if that continues.