Oil Prices Were Mixed After Airlines Canceled Flights

Oil prices were mixed on December 27 after airlines called off thousands of flights over the Christmas holidays amid surging Covid-19 cases. Companies canceled more than 2,000 flights as the rapid spread of the omicron variant affected operations. The staffing shortages disrupted travel for thousands of people, many of whom skipped holiday travel in 2020. Airlines including United Airlines,  JetBlue Airways, and others cited the spread of the omicron variant as a reason for cancellations.

On December 26, airlines canceled more than 700 U.S. flights, an improvement from the 1,500 they called off on December 26. United Airlines canceled 85 flights on December 27 or 4% of its mainline schedule. Delta called off 54 flights and Alaskan Airlines canceled 76 flights. Companies try to inform travelers of cancellations as early as possible so customers don’t make unnecessary trips to the airport. 

Oil prices on December 27

West Texas Intermediate (WTI) crude dropped 85 cents or 1.2% to $72.94 a barrel by 11:00 GMT. The U.S. market was closed on December 24 for a holiday. On the other hand, Brent crude gained 11 cents or 0.1% to $76.25.

Brent jumped by more than 45% in 2021, supported by recovering demand and supply cuts by OPEC+. 

Oil, which fell by more than 10% on November 26, gained last week after early data suggested that the omicron variant could cause a milder level of illness. 

Talks resume on December 27 between global powers and Iran on rejuvenating Tehran’s 2015 nuclear deal. One day earlier, Iran said that oil exports were the focus of the talks.

Investors are also waiting for the next OPEC+ meeting. On January 4, OPEC and its allies will decide whether to go ahead with a planned 400,000 barrels per day (bpd) production increase in February.