Oil prices fall as Omicron’s rapid expansion lowers fuel demand forecasts Reuters

Author: Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices fell by 3% on Monday as a rise in the Omicron coronavirus variant sparked investor concerns in Europe and the United States as new business cuts to address its expansion could affect fuel demand.

futures fell $ 2.14 or 2.9% to $ 71.38 a barrel for 0747 GMT, and US West Texas Intermediate (WTI) gross futures fell $ 2.45 or 3.5% to $ 68.41 a barrel.

“Today’s Asia … weak oil price sentiment and it seems to match the observed weakness,” said Kelvin Wong, CMC Markets market analyst.

“(This is because of the fear that the reductions in upcoming activities will reduce the current spread of the COVID-19 Omicron variant worldwide, which may increase the risk of slowing demand.”

The Netherlands joined the blockade on Sunday and before the Christmas and New Year holidays there was a chance to implement further COVID-19 restrictions in several European countries.

U.S. health officials on Sunday urged Americans to take booster shots, wear masks, and be careful if they travel during the winter holidays, as the Omicron variant has become popular around the world and will take over as the main strain in the United States.

Meanwhile, U.S. energy companies added oil and rigs for the second week in a row this week.

The number of oil and gas platforms, an early indicator of future production, rose to three 579 in the week to December 17, the highest since April 2020, Baker Hughes Co., an energy services company said in a report on Friday.

However, lower exports from Russia are expected to reach 56.05 million tonnes of exports in the first quarter of 2022, and 58.3 million tonnes in the fourth quarter of 2021, according to the quarterly export calendar seen by Reuters on Friday.

Chinese diesel exports fell 69% in November from a year ago, with refineries prioritizing domestic supply to ease fuel cuts as state-backed refineries raised oil processing rates.