Oil Closes Mixed as Investors Gauge Omicron Impact in Short Holiday Trade

By Adedapo Adesanya

Oil prices closed mixed on Friday in a short holiday trade after a three-day rally, with investors trying to gauge the omicron coronavirus variant’s impact on demand.

While the Brent crude lost 29 cents or 0.4 per cent to trade at $76.56 per barrel, the United States West Texas Intermediate (WTI) crude closed $1.03 or 1.42 per cent higher to sell at $66.26 per barrel.

This happened as the markets in the US were closed on Friday for the Christmas holiday.

Crude oil prices have recovered this week as fears over the impact of the highly infectious omicron variant on the global economy receded, with early data suggesting it causes a milder level of illness.

However, investors remain cautious as infections continue to surge with the United Kingdom and France reporting record numbers of new COVID-19 infections on Friday as the spreading Omicron variant forced global airline carriers to cancel thousands of flights.

Thailand reported its first Omicron cluster in the northeast province of Kalasin, saying 21 infections stemmed from a Belgium couple who had travelled to the country earlier this month.

In Europe, Italy has reintroduced mandatory face masks outdoors, and Greece has ordered people to wear masks indoors and outdoors.

In South America, Ecuador made vaccines compulsory for nearly all to combat coronavirus infections surging globally just before the Christmas holidays.

Not all news was negative as South Africa eased a number of coronavirus curbs, despite being hit by the fourth wave of cases driven by the Omicron variant.

The US will lift its ban on travel from eight southern African nations beginning December 31.

The number of active drilling rigs in the US last week rose by 7, bringing the total to 586 as oil prices remain relatively strong despite the fresh COVID-19 wave brought by the new variant of the coronavirus.

Last week’s count compared with a rig count rise of 3 for the previous week, which brought the total to 579.

A higher U.S. rig count also added to pressure on the oil market.

Oil production in the US last week stood at 11.6 million barrels per day, according to the Energy Information Administration (EIA).

This was down from 11.7 million barrels per day for the previous week but up from 11 million barrels per day a year ago. The four-week average production was estimated at 11.65 million barrels per day.