Across the world, we have seen significant bullish pressure in multiple risk assets as the fears of the omicron variant seems to have abated. As it appears that the version is a milder coronavirus, this does bode well for the future. As the virus mutates, it typically will become more contentious but much less virulent. We have seen multiple markets rise during the course of the week, with US indices reaching towards all-time highs.
With the bullish pressure seen and risk assets, it suggests that starting next year, people will be jumping in with both feet to put on risk. The crude oil markets have turned around completely during the course of the week, which is particularly noteworthy considering it was one of the first markets to get hammered after the omicron variant was discovered.
US oil rig count jumps
With higher pricing, US drillers have continued to put new rigs online, adding another seven this past week. There is a total of 586 oil rigs online at the moment, despite the fact that there is a fresh wave of Covid 19 cases brought on by the new variant. That being said, the Baker Hughes rig count is 238 higher than this time last year, suggesting that the strength in the oil market is going to continue to put more production online. As this happens, it could offer a little bit of a buffer to higher pricing, but it takes a certain amount of time before the output to have an effect on the overall pricing.
As the omicron variant has been milder than previously thought, demand for crude oil should continue to pick up over the next several months. The production of crude oil in the United States last week stood at 1.6 billion barrels per day, up 11 million barrels per day a year ago.
Crypto bill coming next year
Sen. Cynthia Lummis is planning on introducing a broad crypto bill in 2022, in the United States. The bill would create a new crypto regulatory body and establish digital asset tax laws. The center is a well-known Bitcoin evangelist and is probably the one lawmaker out there that knows enough about crypto to put together an intelligent bill, something that is desperately needed in the United States. As the crypto markets get regulated in the United States, it will allow larger implications of crypto in the real world use case, which of course is exactly what crypto needs to thrive in America.
Ultimately, the industry has been looking for some type of regulatory framework, and it looks like sometime early to mid-2022, it will get the first attempt at a framework to get crypto regulated like other assets. If and when that does happen, you will see crypto legitimized on several platforms and in several retirement type accounts. Crypto is still in its infancy, with the United States been especially backwards when it comes to its regulation.
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