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Oil prices slide as rapid Omicron spread dims fuel demand outlook


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Author of the article:

Reuters

Jessica Jaganathan

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Publishing date:

Dec 19, 2021  •  22 minutes in the past  •  2 minute learn  • 

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SINGAPORE — Oil prices slumped by greater than 2% on Monday as surging instances of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new restrictions on companies to fight its spread might hit fuel demand.

Brent crude futures fell $1.92, or 2.6%, to $71.60 a barrel by 0436 GMT whereas U.S. West Texas Intermediate (WTI) crude futures fell $2.09, or 3%, to $68.77 a barrel.

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“Today’s Asia … weak sentiment in oil prices seems to go in line with a weakness seen in the S&P 500 and Nasdaq 100 e-mini futures,” stated Kelvin Wong, market analyst at CMC Markets.

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“(This is) due to fears of impending restrictions on economic activities to contain the current increasing spread of the COVID-19 Omicron variant worldwide which may increase the risk of demand slowdown.”

The Netherlands went into lockdown on Sunday and the potential of extra COVID-19 restrictions being imposed forward of the Christmas and New Year holidays loomed over a number of European nations.

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U.S. well being officers urged Americans on Sunday to get booster photographs, put on masks and watch out in the event that they journey over the winter holidays, as the Omicron variant raged the world over and was set to take over as the dominant pressure within the United States.

Meanwhile, U.S. vitality companies this week added oil and pure fuel rigs for a second week in a row.

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The oil and fuel rig depend, an early indicator of future output, rose by three to 579 within the week to Dec. 17, its highest since April 2020, vitality companies agency Baker Hughes Co stated in its intently adopted report on Friday.

Still, decrease exports are anticipated from Russia with exports and transit of oil from the nation deliberate at 56.05 million tonnes within the first quarter of 2022 versus 58.3 million tonnes within the fourth quarter of 2021, a quarterly export schedule seen by Reuters confirmed on Friday.

China’s diesel exports in November plunged 69% from a 12 months in the past as refineries prioritized home provide to ease a fuel crunch with state-backed refineries having raised oil processing charges. (Reporting by Jessica Jaganathan; Editing by Kenneth Maxwell)

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