Oil Prices Head To Weekly Loss On Omicron Coronavirus Uncertainty

Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, USA, April 27, 2020. REUTERS / Adrees Latif / File Photo

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  • Brent down 1%, WTI down 1.1% at 05:30 GMT; set for weekly loss
  • Omicron demand concerns and supply improvement weigh on prices

SINGAPORE, Dec. 17 (Reuters) – Oil prices fell on Friday, putting the market on track for a weekly loss, as rising cases of the Omicron coronavirus variant raised fears that further restrictions would affect fuel demand, while a weaker dollar has largely supported commodity markets.

Brent crude futures fell 74 cents, or 1%, to $ 74.28 a barrel at 05:30 GMT, while US West Texas Intermediate (WTI) crude futures fell 81 cents , or 1.1%, at $ 71.57 per barrel. Brent is heading for a loss of 1.2% this week, while WTI is poised to end the week down 0.1%.

“Look at what’s going on with Omicron – that’s a negative that people are trying to digest. Are we going to be in line for further restrictions? That’s what the market is trying to digest,” said Vivek Dhar, Commonwealth Bank commodities analyst.

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In Denmark, South Africa and the UK, the number of new cases of Omicron is doubling every two days. Danish Prime Minister Mette Frederiksen warned Thursday that the government could impose new restrictions to limit the spread of Omicron. Read more

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

“Crude continues to face significant headwinds from the Omicron variant, with the demand outlook for early next year affected, but OPEC + is ready to act if the situation calls for it. will continue to support prices for now, ”said Craig Erlam, analyst at OANDA. a note.

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 warrant a shift. reconsidering their plan to add 400,000 barrels per day of supply. in January.

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 expects oil consumption to reach new heights. record in 2022 and 2023. read more

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

“The supply tightening is easing with a monthly addition of 400,000 barrels per day (bpd) of OPEC + and US oil production of 11.7 million bpd,” ANZ Bank said in a note Friday. .

The benchmarks Brent and WTI both gained around 2% on Thursday, supported by record implied demand in the US and a weaker US dollar as the Bank of England surprised markets with a rate hike, adopting a more hawkish stance than the Federal Reserve.

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Reporting by Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; Editing by Richard Pullin and Kenneth Maxwell

Our Standards: Thomson Reuters Trust Principles.

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Natalee Broderick

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