oil and gas

Oman crude prices sink more than 4% on Omicron fears

December 21, 2021

Muscat – Oman crude prices fell by more than four per cent on Monday, as energy demand fears grew over the fast-spreading Omicron variant of coronavirus.

Price of Oman crude contract (for February 2022 delivery) at the Dubai Mercantile Exchange (DME) dropped by US$3.1 or 4.2 per cent to close at US$70.15 per barrel on Monday.

As per the DME data, average price of Oman crude (for December delivery) has stabilised at US$81.58 per barrel, which is US$8.8 per barrel higher compared with the price for November delivery.

Global oil benchmarks – Brent crude and Western Texas Intermediate (WTI) – tumbled by more than five percent as traders fretted over the impact on the world’s appetite for energy, which has already taken a heavy blow since the pandemic erupted early last year.

In morning deals, Brent North Sea crude tumbled 5.1 per cent to US$69.79 per barrel and New York’s West Texas Intermediate oil lost 5.7 per cent to US$66.84 per barrel.

The rapid spread of Omicron has slammed the oil market – and broader global stock markets – on concerns about economic fallout as countries revert back to containment measures.

“For crude oil, it is all about demand concerns right now,” ThinkMarkets analyst Fawad Razaqzada told AFP.

“Travel restrictions have been tightened across most of Europe and there is the potential for more measures to be announced in the coming days. Traders are thus left with little choice but to sell oil, as well as energy and travel stocks, with very little appetite for risk-taking,” he said.

Since it was first reported in South Africa in November, Omicron has been identified in dozens of countries, prompting many to reimpose travel restrictions and other measures.

muscatdaily

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