Global Crude Oil Prices Post Weekly Loss on Omicron Uncertainty, Energy News, ET EnergyWorld


NEW YORK: Oil prices fell on Friday and were also down during the week as increasing cases of the Omicron coronavirus variant raised concerns that further restrictions would affect fuel demand.

“There are concerns about COVID that will not go away, and the perception that may be weighing on demand is putting pressure on the market,” said Bob Yawger, director of energy futures at Mizuho in New York.

Brent crude futures were down $ 1.50, or 2%, to $ 73.52 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $ 1.52, or 2.1%, to come in at $ 70.86 a barrel. Brent fell 2.6% for the week and WTI fell 1.3%.

In Denmark, South Africa and Britain, the number of new cases of Omicron is doubling every two days. Danish Prime Minister Mette Frederiksen said on Friday her government would propose new restrictions to limit the spread.

In the United States, the rapid spread of the Omicron variant has led some companies to suspend plans to return workers to offices.

“Messages of caution and warnings of a worsening wave of COVID are starting to ring louder as the holiday season approaches, dampening market sentiment,” said Vandana Hari, analyst energy at Vanda Insights. “Crude could remain in a sustaining configuration, albeit with a lot of price volatility around the mid-point, in trading thinned out during the holidays over the next two weeks.”

The Organization of the Petroleum Exporting Countries, Russia and their allies, known together as OPEC +, have said they could meet before their meeting scheduled for Jan. 4 if changing demand prospects justify a shift. reconsidering their plans to add 400,000 barrels per day of supply in January.

“We may see further consolidation around $ 70 over the next few sessions as we learn more about Omicron, the restrictions it will bring and whether OPEC + responds,” said Craig Erlam, senior market analyst at OANDA.

The number of US oil rigs, a leading indicator of production, rose during the week, raising concerns about a potential oversupply. The number of oil and gas rigs, an early indicator of future production, increased by three to 579 in the week to Dec. 17, energy services firm Baker Hughes Co said in its follow-up report on Friday. close.

But despite Omicron’s threats to demand, Goldman Sachs said on Friday that the new variant had limited impact on mobility or demand for oil, adding that it expected oil consumption to hit rock bottom. record levels in 2022 and 2023.

Oil prices retreated from multi-year highs earlier in the fourth quarter on improving supplies.

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