Oil prices opened the financial week lower affected by the outbreak of the Coronavirus Omicron variant.
Investors’ fears are increasing, under pressure from the growing fears that some countries will impose new restrictions with the increase in Coronavirus infections.
Brent crude futures fell by about 3.5%, to reach the February contract, to $71 a barrel, while US crude contracts fell to the level of $68 a barrel.
Two days ago, China urged residents of the country’s high-risk areas not to travel unless necessary, with the New Year holidays and spring holidays approaching.
China has currently classified 69 regions as medium or high risk for the possibility of an outbreak of the Coronavirus.
According to the latest data released on Monday, China’s imports of crude oil from Saudi Arabia in November fell 13% year on year.
The imports rose on a monthly basis compared to October, with the kingdom remaining the lead supplier to the largest importer of oil in the world.
In a related context, data from the General Administration of Customs in China showed that Saudi oil flows to China amounted to 7.4 million tons last month, which is equivalent to 1.8 million barrels per day.
This is compared to about 1.67 million barrels per day in October and 2.06 million barrels per day in November of the last year.
Some European countries are witnessing restrictions on the upcoming celebrations of the New Year holidays, including France, which recorded nearly 50,000 new cases of the virus.
As well as, Ireland imposed a night-time closure, and the Netherlands imposed a strict closure until mid-January.
The IEA expected a surplus in the oil market during the first quarter of next year. It also expected an increase in supply and a decline in demand with the state of uncertainty in light of the new developments from the Coronavirus.
In a related context, IEA stressed caution against burning coal to generate electricity, fearing that it would hit a record level, despite pressure to stop global warming.
It found that rising natural gas prices had led to a resurgence of coal over the past 12 months in India, China, the European Union and the United States.
IEA also expects consumption in the United States and Europe to decline next year.