Oil prices have risen to record gains, despite the continued pressures due to the Omicron variant.
Analysts expect the continuation of fluctuations in oil prices during the current week, between the shortage of supplies and the Omicron outbreak.
Omicron is curbing the growth of global demand, especially for fuel, with the cancellation of thousands of flights in the United States and abroad, which has weakened the consumption of jet fuel in particular.
And the specialists pointed out that the energy ministers of the group of producers in the “OPEC+” alliance are preparing to hold a new monthly meeting at the beginning of the new year, amid speculation about the possibility of taking a decision to postpone or reduce the monthly production increase of crude oil, which amounts to 400,000 barrels per day due to the crisis of the exacerbation of the epidemic. Consequently, global demand growth faltered.
They noted that the correlation between crude oil prices and the developments of the Omicron variable crisis decreased somewhat in the past week.
The general decline in US crude oil inventories and disruption to Libyan oil supplies moved prices higher.
Strong demand reinforced the decline in oil stocks on a weekly basis at 4.7 million barrels. And the crisis in Libya led to an immediate drop in production by about 300,000 barrels per day.
In this context, Ross Kennedy, managing director of QHI International Energy Services, says that uncertainty dominates the crude oil market and may push more price fluctuations.
But trading in the past week witnessed good gains due to expectations that Omicron is less severe and dangerous than previous strains, especially Delta, which led to a reduction in concerns about demand damage.
He stated that the futures contracts for West Texas Intermediate crude rose by 1.4 percent at the end of last week, amid a state of poor liquidity and quiet trading related to the long holiday period in most countries of the world, with the approach of the end of the Gregorian year.
This was accompanied by British medical reports suggesting that the Omicron variant would result in a lower patient need for hospitalization compared to the previous Delta strain.