Oil Prices On Track For Weekly Loss On Omicron Uncertainty

Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, USA, April 27, 2020. REUTERS / Adrees Latif / File Photo

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  • Benchmarks fall over $ 1, set for weekly loss
  • Omicron demand concerns and supply improvement weigh on prices
  • Goldman Sachs predicts record consumption in 2022, 2023

LONDON, Dec. 17 (Reuters) – Oil prices fell on Friday, putting the market on track for a weekly loss, as rising cases of the Omicron coronavirus variant raised fears that further restrictions would affect fuel demand.

Brent crude fell $ 1.54, or 2%, to $ 73.48 a barrel at 3:10 p.m. GMT, while U.S. West Texas Intermediate (WTI) crude fell $ 1.51, or 2%, to 70 , $ 87 per barrel.

In Denmark, South Africa and Britain, the number of new cases of Omicron is doubling every two days. Danish Prime Minister Mette Frederiksen said on Friday her government would propose new restrictions to limit its spread. [nL1N2T211Q]

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In the United States, the rapid spread of the Omicron variant has led some companies to suspend plans to return workers to offices. Read more

“Messages of caution and warnings of a worsening wave of COVID are starting to ring louder as the holiday season approaches, dampening market sentiment,” said Vandana Hari, analyst energy at Vanda Insights.

“Crude could remain in a sustaining configuration, albeit with a lot of price volatility around the mid-point, in trading thinned out during the holidays over the next two weeks.”

The Organization of the Petroleum Exporting Countries Russia and their allies, collectively known as OPEC +, have said they could meet before their meeting scheduled for Jan. 4 if changes in demand outlook justify a review of their plans to add 400,000 barrels per day of supply in January.

“We may see further consolidation around $ 70 over the next few sessions as we learn more about Omicron, the restrictions it will bring and whether OPEC + responds,” said Craig Erlam, senior market analyst at OANDA.

But despite Omicron’s threats to demand, Goldman Sachs said on Friday that the new variant had limited impact on mobility or demand for oil, adding that it expected oil consumption to hit rock bottom. record levels in 2022 and 2023. read more

Oil prices also retreated from multi-year highs earlier in the fourth quarter on improving supplies.

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Additional reporting by Sonali Paul in Melbourne and Roslan Khasawneh in Singapore; Editing by Paul Simao and Edmund Blair

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