Another Difficult Day for Oil Prices

Oil prices declined on December 20 as surging cases of Covid’s new variant in Europe and the United States stoked investor worries that new restrictions to tackle the spread could affect the oil demand.

Brent crude futures dropped $2 or 2.07% to $71.52 per barrel. U.S. West Texas Intermediate (WTI) crude futures declined $2.63 or 3.7% to $68.23 per barrel.

Brent crude futures dropped to a session low of $6928 per barrel. West Texas Intermediate crude futures fell $66.04 per barrel. Both of them fell to their lowest levels since early December.

Oil prices and Covid’s new variant

Covid’s new variant continues to dominate the headlines all over the world. Last week, the Netherlands went into lockdown, as the country is struggling to deal with challenges. European countries are trying to limit the spread of the Omicron variant of Covid-19. Asian countries are also struggling to cope with the new variant.

The situation is also quite complicated on the other side of the Atlantic Ocean. On Sunday, U.S. health officials urged Americans to get Covid-19 booster shots. Officials also asked people to wear masks.

One day later, oil prices declined in spite of Moderna’s announcement. The company announced that a booster dose of its Covid-19 vaccine appeared to be protective against Omicron in laboratory testing.

In the meantime, OPEC+ compliance with oil production cuts stood at 117% in November, up one percentage point from November.

Oil prices recovered on December 21 after a sharp fall in the previous session. Brent crude futures gained 84 cents or 1.2% to $72.36 a barrel by 11:17 GMT. West Texas Intermediate crude futures added 95 cents or 1.4% to $69.56 a barrel.