Brent Crude Oil Drops 2 Percent to $73.48 Per Barrel on Omicron Concerns

Surging Omicron cases dragged on global oil prices amid concerns over the negative effect of new restrictions on oil demand.

Brent crude, oil against which Nigerian oil, is priced shed $1.54 or 2 percent to $73.48 per barrel at 5:10 pm Nigerian time. The U.S. West Texas Intermediate (WTI) dropped by $1.54 or 2 percent to $70.87 a barrel.

Oil prices drop after Mette Frederiksen, Prime Minister of Denmark, announced that her government would propose new restrictions to limit the spread of Omicron cases following a report from Denmark’s Health Minister Magnus Heunicke that the country has registered 11,559 new Omicrown cases, with 2,550 cases recorded in the last 24 hours.

This was after South Africa and the United Kingdom reported a jump in the number of new omicron cases in the last two days.

Oil prices are “dragged lower as trading becomes more risk-averse at the end of the week. It had rebounded well over the last couple of days but has run into resistance at the upper end of its recent range, around $73. We could see further consolidation around $70 in the coming sessions as we learn more about omicron, what restrictions it will bring, and whether OPEC+ will react,” said Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA.

In the United States, the story is not different, companies are now halting plans to get workers back to offices to curb the spread of the virus.

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

“Crude may remain in a holding pattern, albeit with plenty of price volatility around the mean, in holiday-thinned trading over the next couple of weeks.”