Oil prices declined on Wednesday as investors waited for more information regarding the impact of the Omicron coronavirus variant on the global economy and fuel demand.
On Wednesday, Brent crude futures fell 40 cents or 0.5% to $75.04 a barrel at 07:48 GMT. One day earlier, Brent crude futures gained 3.2%. U.S. West Texas Intermediate (WTI) crude dropped 55 cents or 0.8% to $71.50 a barrel. On Tuesday, WTI crude advanced 3.7%.
After a collapse last week, oil prices recovered this week on rising optimism that Covid’s new variant will not cause major economic damage.
The Omicron variant of the Covid-19 can partially evade the protection from two doses of Pfizer’s vaccine. This information stated above came from the research head of a laboratory at the Africa Health Research Institute.
Oil prices and international relations
Apart from the Omicron variant other factors also have the potential to affect oil prices. Currently, the market is also focusing on several topics including Iran nuclear talks, tensions between Russia and Ukraine. Investors are also monitoring the weather in the northern hemisphere.
Relations between the U.S. and Iran are full of challenges. Indirect talks between the countries on reinstating their nuclear pact resumed a week ago but broke off on Friday, with a resumption scheduled for later this week, as Western officials voiced dismay at sweeping Iranian demands.
On Tuesday, President Joe Biden warned his counterpart Vladimir Putin that the West would impose sanctions on Russia. Biden made it clear that the West is ready to take measures if Russia invades Ukraine. President Biden warned Putin he could face economic sanctions, the disruption of the Nord Stream 2 gas pipeline to Europe. He also mentioned that the U.S. and European allies are ready to provide additional defensive capabilities to Ukraine.
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