Oil stabilizes near $ 75 as investors assess Omicron’s impact

Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma on March 24, 2016. REUTERS / Nick Oxford / File Photo

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  • Oil made gains earlier this week after last week’s collapse
  • UK PM to announce new restrictions – reports
  • API shows crude stocks are falling and fuel stocks are increasing – sources

LONDON, Dec. 8 (Reuters) – Oil prices stabilized above $ 75 a barrel in choppy trading on Wednesday, pausing after strong gains earlier this week, as investors assessed the impact of the variant of the Omicron coronavirus on the global economy and fuel demand.

Brent crude futures fell 27 cents, or 0.4%, to $ 75.17 a barrel at 2:26 p.m. GMT, after rising nearly $ 1 previously.

US West Texas Intermediate crude was at $ 71.63 a barrel, down 42 cents or 0.6%, after hitting $ 72.79 earlier in the session.

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After falling more than 16% since November 25 to around $ 69 a barrel, Brent crude prices have rebounded more than 9% since December 1 on signs that Omicron has had only limited impact on the demand for oil.

“About two-thirds of the previous price drop (have) been corrected, a drop that was prompted by demand concerns over the new Omicron variant. These now appear to be exaggerated,” Commerzbank said in a statement. note.

“There has not yet been a noticeable slowing effect on oil demand. Even aviation, the sector that should have been hit first, has seen only a marginal decrease in the number of seats. “

But reports that British Prime Minister Boris Johnson was set to tighten COVID restrictions, including advice for working from home, rekindled fears of a slowdown in activity.

The market also focused on rising geopolitical tensions as talks between Washington and Tehran over Iran’s nuclear program were due to resume this week, with Western officials expressing dismay at sweeping Iranian demands. Read more

A relaxation of US sanctions is expected to lead to an increase in Iranian oil exports, which could add downward pressure on oil prices.

Meanwhile, tensions between Western powers and Russia over Ukraine also remained high after President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose “strong economic and other measures” to Russia if it invaded Ukraine, while Putin demanded guarantees that NATO would not expand further east. Read more

Oil markets reacted little to weekly US inventory data.

Inventories of U.S. crude fell last week as inventories of gasoline and distillate rose, according to market sources citing figures from the American Petroleum Institute on Tuesday.

Analysts polled by Reuters expected US crude inventory data to show a second consecutive weekly decline.

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Additional reporting by Yuka Obayashi; edited by Ana Nicolaci da Costa, Jason Neely and Mark Heinrich

Our Standards: Thomson Reuters Trust Principles.

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