Oil Slips After Restrictions to Counter Omicron Variant

By Reuters
December 9, 2021 Updated: December 9, 2021

LONDON—Oil prices eased after early gains on Thursday after measures by some governments to slow the spread of the Omicron coronavirus variant, though losses were capped by comments from vaccine makers about the efficacy of their jabs.

Brent crude futures fell 47 cents, or 0.6 percent, to $75.35 a barrel by 1004 GMT after touching a peak of $76.70. U.S. West Texas Intermediate (WTI) crude futures fell 31 cents, or 0.4 percent, to $72.05 after a session high of $73.34.

British Prime Minister Boris Johnson imposed tougher COVID-19 restrictions in England on Wednesday, saying people should work from home where possible and wear masks in public places and show COVID-19 vaccine passes for entry to certain events and venues.

Denmark also plans new restrictions, including closure of restaurants, bars, and schools, while China has halted group tourist trips from Guangdong.

“Oil demand is thus unlikely to escape completely unscathed, though the effects will probably not be nearly as serious as initially feared,” Commerzbank said.

Markets were buoyed by comments from BioNTech and Pfizer that a three-shot course of their COVID-19 vaccine could protect against infection from the Omicron variant.

The Omicron outbreak sparked a 16 percent slump in Brent prices from Nov. 25 to Dec. 1. More than half of the drop has been recouped this week, but analysts say a further recovery could be limited until Omicron’s impact is clearer.

U.S. inventory data released on Wednesday also weighed on prices.

Energy Information Administration (EIA) data showed that crude inventories were down by 240,000 barrels last week, much less than analysts in a Reuters poll had expected, with stocks at the Cushing delivery hub in Oklahoma rising by 2.4 million barrels.

Fuel stocks also rose by a combined 6.6 million barrels, the data showed.

By Ahmad Ghaddar