By Adedapo Adesanya
The crude oil market was weakened on Monday by more than 2 per cent amid fresh Omicron fears, causing the Brent to decline by $1.83 or 2.49 per cent to trade at $71.69 per barrel as the West Texas Intermediate (WTI) lost $2.20 or 3.1 per cent to settle at $68.66 per barrel.
Surging cases of the Omicron coronavirus variant in Europe and the United States poked investors to worry that new mobility restrictions to combat its spread could hit fuel demand.
The United Kingdom said it would not rule out coronavirus restrictions before Christmas after the government previously recommended working from home if possible.
The Netherlands implemented new strict lockdowns on Sunday, with bars, restaurants, and nonessential shops ordered shut until mid-January. And only four guests will be allowed per household over the holidays.
Germany will ban travellers from the UK starting on Monday, and Ireland has instituted an 8 p.m. curfew for bars, restaurants, and live events.
US health officials urged Americans on Sunday to get booster shots, wear masks and be careful if they travel over the winter holidays as the country signalled that it is unlikely to institute new lockdowns.
Omicron, already present in 89 separate countries, is prompting other countries to employ further restrictions.
The market could not be swayed even as Moderna announced on Monday that a booster dose of its COVID-19 vaccine appeared to be protective against Omicron in laboratory testing.
The International Energy Agency (IEA) said last week that while the surge in COVID cases was set to temporarily slow the recovery in global oil demand, the impact of the Omicron variant would likely be more muted than previous waves and wouldn’t’ upend the current demand recovery.
Yet, the outcome of Monday’s trading pushed that to the side with the lockdowns clamping down on expected oil demand, which is projected to improve next year.
Meanwhile, the Organisation of the Petroleum Exporting Countries and allies (OPEC+) compliance with oil production cuts stood at 117 per cent in November, up a per cent from the previous month’s 116 per cent, as output continues to lag behind agreed targets.
Modupe Gbadeyanka