Oil prices extended their gains to about 3% during Monday’s trading, with US crude rising above $75 a barrel, while monitoring the developments of the Omicron variable.
Crude prices fell earlier in trading, after airlines canceled thousands of flights in the United States during the Christmas holidays as fears grew over the Omicron mutator.
Oil prices today
West Texas Intermediate (WTI) crude futures prices – for February delivery – rose by 2.3%, recording $75.55 a barrel, after touching a low of $72.57 a barrel earlier in the session.
The prices of Brent crude futures – February 2022 delivery – also rose by about 3%, recording $78.40 a barrel, after falling at $75.75 during trading.
The two benchmarks prices (Brent and US broker) jumped 3% to 4% last week after early data indicated that the Omicron mutant could cause a milder level of illness.
However, the highly transmissible mutant is causing an increase in the number of coronavirus cases worldwide.
In the past 3 days, thousands of passengers were stranded after American airlines canceled their flights due to lack of staff in light of the measures taken to prevent the spread of Corona.
“Lower travel equals lower economic activity in the US, which means lower WTI price,” said Jeffrey Haley, senior analyst .
Market watchers said that oil markets, in general, remain cautious about near-term demand.
“Although omicron is spreading faster than any other type of corona mutant, the relatively comforting news is that most people infected with omicron are showing mild symptoms, at least for now,” said Leona Liu, an analyst at DailyFX in Singapore.
“However, oil prices suffered due to Omicron’s concerns, but the negative pressure may ease if the mutant proves to be more benign,” she added.
In Europe, natural gas prices touched record levels, last week, against the backdrop of tight supplies, and support for Brent crude prices.
Russian President Vladimir Putin said on Friday that the European Union can only blame its own policies on record gas prices, saying some of its members are reselling cheap Russian gas at much higher prices within the bloc.
Looking ahead, oil investors are focusing on the upcoming OPEC+ meeting scheduled for January 4th, during which production policy will be decided in February.
The Organization of the Petroleum Exporting Countries and its outside allies led by Russia, in the alliance known as OPEC+, will meet to decide whether to go ahead with a 400,000 bpd production increase in February.
Russian Deputy Prime Minister Alexander Novak said on Friday that Russia believes that oil prices are unlikely to change significantly next year with demand only recovering to pre-pandemic levels by the end of 2022.