Oil prices head for weekly loss on Omicron uncertainty

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LONDON:

Oil costs dipped on Friday, placing the market on monitor for a weekly loss, as surging circumstances of the Omicron coronavirus variant raised fears new curbs might hit gas demand.

Brent crude futures fell $1.14, or 1.5%, to $73.88 a barrel at 0952 GMT whereas US West Texas Intermediate (WTI) crude futures dropped $1.11, or 1.5%, to $71.27 a barrel. Brent and WTI are each headed for a 1.4% loss this week.

In Denmark, South Africa and Britain, the variety of new Omicron circumstances has been doubling each two days. Denmark’s Prime Minister Mette Frederiksen on Thursday warned the federal government might impose additional curbs to restrict its unfold.

In the USA, the speedy unfold of the Omicron variant has led some firms to pause plans to get staff again into places of work.

“Messages of warning and warnings of a worsening Covid wave are beginning to ring louder with the method of the year-end vacation season, dampening market sentiment,” stated Vandana Hari, power analyst at Vanda Insights.

“Crude might stay in a holding sample, albeit with loads of value volatility across the imply, in holiday-thinned buying and selling over the subsequent couple of weeks.”

The Organisation of the Petroleum Exporting Nations, Russia and allies, collectively generally known as OPEC+, have stated they might meet forward of their scheduled January Four assembly if adjustments within the demand outlook warrant a assessment of their plans so as to add 400,000 barrels per day of provide in January.

However regardless of the Omicron threats to demand, Goldman Sachs stated on Friday the brand new variant has had a restricted influence on mobility or oil demand, including it expects oil consumption to hit report highs in 2022 and 2023.

Oil costs have additionally retreated from multi-year highs earlier within the fourth quarter on improved provides.