LONDON. Oil prices stabilized at around $ 75 a barrel on Wednesday, taking a breather after strong gains earlier this week as investors continued to assess the impact of the Omicron coronavirus variant on the global economy and fuel demand.
Brent crude futures fell 19 cents, or 0.25 percent, to $ 75.25 a barrel at 09:25 GMT after rising 3.2 percent on Tuesday. US West Texas Intermediate crude was trading at $ 71.78 a barrel, down 27 cents, or 0.4 percent, up 3.7 percent in the previous session.
After falling more than 16 percent from November 25 to around $ 69 a barrel, Brent crude prices have jumped nearly 10 percent since December 1, suggesting that Omicron has had only a limited impact on oil demand so far.
“Roughly two-thirds of the previous price cuts have (been) corrected, driven by demand concerns driven by the new Omicron option. Now they seem to be exaggerated, “- said in a message from Commerzbank.
“There is no noticeable slowing down effect on oil demand so far. Even aviation, the sector that should have been hit in the first place, has seen only a slight reduction in seating capacity. ”
The Omicron variant has been reported in 57 countries, with COVID-19 cases on the rise in southern Africa, including Zimbabwe, and the number of patients requiring hospitalization is likely to grow as it spreads, the World Health Organization said Wednesday.
The market has also been focused on rising geopolitical tensions, as talks between Washington and Tehran over an Iranian nuclear program were due to resume this week as Western officials raised concerns about Iran’s sweeping demands.
Easing US sanctions is expected to lead to an increase in Iranian oil exports, which could put downward pressure on oil prices.
Meanwhile, tensions between Western powers and Russia over Ukraine also remained high after President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose “severe economic and other measures” on Russia if it invades Ukraine. while Putin demanded guarantees that NATO would not expand further east.
Oil markets reacted little to weekly US stock data.
According to market sources citing data from the American Petroleum Institute on Tuesday, US crude inventories fell last week, while gasoline and distillate inventories rose.
Analysts polled by Reuters predict the US oil inventory data will show a second consecutive week of decline.