Oil prices fell early Friday and were on course for a weekly loss as the rapidly spreading Omicron COVID variant raised concerns about a potential impact on oil demand, while the Fed’s hawkish stance of Tightening monetary policy next year began to raise economic concerns. growth.
At 10:00 a.m. EDT on Friday, WTI crude was down 1.87% to $ 71.10 and Brent crude prices had fallen 1.75% to $ 73.71.
Oil prices were up Wednesday and Thursday, following a bullish Energy Information Administration (EIA) inventory report showing lower U.S. inventories of crude and petroleum products and record oil demand in America for the week of December 10.
However, the rapidly spreading Omicron variant and the possibility that tighter monetary policy could hurt economic growth next year weighed on the oil market early on Friday.
“Crude futures were under slight pressure on Friday morning in Asia as Omicron concerns returned to center stage after the market took in the relief and optimism sparked by the Federal Reserve US and a bullish set of weekly US stocks and demand data Wednesday, “Vanda Insights said in a Remark.
“As the week draws to a close, markets are focusing on the high rates of transmissibility reported for the Omicron variant, but are struggling to assess all of its implications and impact,” added Vanda Insights.
UK reported a record number new daily cases of COVID for a second consecutive day Thursday, Germany warned of a “massive fifth wave” of infections at Omicron, while cases are also increasing in the United States, with Omicron spreading rapidly.
“Omicron’s developments continue to impact the near-term demand outlook,” Ole Hansen, Head of Commodities Strategy at Saxo Bank, noted Friday.
“A weaker dollar has been offset by tighter monetary policies, which may further ease growth prospects for 2022. As Europe faces a worsening energy crisis, milder-than-normal weather in Asia has resulted in lower demand for fuel products used in power generation and heating, ”added Hansen.
By Tsvetana Paraskova for OilUSD
More reads on Oil Octobers: