As coronavirus cases skyrocket across the world, oil prices have fallen more than 2% on both major oil benchmarks. Brent crude fell 2.2% to $ 77.78 a barrel. WTI crude was also down, this time again 2.31% to $ 75.21.
Coronavirus cases have reached new pandemic heights across the world.
The increase in infections has been driven by the highly transmissible variant Omicron.
Today, City AM tweeted, “Oil prices drop 2% as Omicron variant renews concerns over an oversupply.”
Although the latest variant of the coronavirus is considered more benign, the sharp rise in cases has led many major economies around the world to reintroduce restrictions.
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This is equivalent to 2% lower than the consensus of $ 75.33 in November.
The price drop for 2022 will be the first drop since August.
In December 2021, Brent Crude and WTI Crude posted their biggest annual gains since 2016.
Brent Crude ended the year up 50.5% while WTI posted an increase of 55.5%.
This increase was spurred by the global economic recovery from the doldrums of the coronavirus pandemic.
The oil market has seen an extended period of ultra-low prices amid several coronavirus lockdowns across the world.
Prices rallied in the fall to a three-year high of $ 86.70 per barrel on the benchmark Brent crude index.
Prices also hit a seven-year high of $ 85.41 on WTI crude.
However, the two benchmarks then reported price drops of 13% to less than $ 70 a barrel after the emergence of the Omicron variant.
The new tension has heightened market fears of a return to lockdowns in major industrial economies.