Oil Prices Fell as Omicron Influenced Investor Sentiment

On Monday, oil prices declined by more than 2% as surging cases of Covid’s new variant in Europe and the U.S. affected the sentiment. They are monitoring new restrictions, as they would like to learn more about omicron’s impact on fuel demand. 

 Brent crude oil futures dropped $1.92 or 2.6% to $71.60 a barrel by 04:36 GMT. U.S. West Texas Intermediate (WTI) crude futures declined $2.09 or 3% to $68.77 a barrel.

 On Sunday, the Netherlands went into lockdown. Authorities asked people to spend more time at home. Furthermore, events are not permitted other than funerals, weekly markets selling groceries and professional sports matches. However, people won’t be able to attend matches. 

Other European countries are also struggling to cope with the number of new cases. The situation is quite complicated on the other side of the Atlantic Ocean as well. Last week, U.S. health officials urged Americans to get booster shots. They also urged people to wear masks and be careful if they travel over the winter holidays.

Oil prices and main findings

This week, energy firms from the U.S. added oil and natural gas rigs for a second week in a row. Notably, the oil and gas rig count increased by three to 579 in the week to December 17, its highest since April 2020.

 Nonetheless, lower exports are expected from the Russian Federation with exports and transit of oil from Russia planned at 56.05 million tons in the first quarter of 2022.

 In November, China’s diesel exports fell 69% from a year ago. China exported less diesel as refineries prioritized domestic supply to ease a fuel crunch. State-owned refineries raised oil processing rates. The government of the world’s second-largest economy worked hard to improve the situation.