Oil mixed with new doubts on impact of COVID-19 omicron variant

By Firdevs Yuksel

ISTANBUL (AA) - Oil prices were mixed on Tuesday with the emergence of doubts on the impact of the new COVID-19 omicron variant on the global economic recovery and fuel demand.

International benchmark Brent crude was trading at $74.68 per barrel at 0705 GMT for a 0.39% increase after closing the previous session at $74.39 a barrel.

American benchmark West Texas Intermediate (WTI) was at $71.25 per barrel at the same time for a 0.06% loss after trade ended at $71.29 a barrel in the previous session.

At least one patient infected with the COVID-19 omicron variant has died in the UK, Prime Minister Boris Johnson confirmed Monday.

The UK on Sunday raised its COVID-19 alert level from Level 3 to Level 4 – its second-highest level – amid a surge in cases of the omicron variant. Level 4, according to governmental guidance, means "a COVID-19 epidemic is in general circulation; transmission is high and direct COVID-19 pressure on health care services is widespread and substantial or rising."

China, the world's largest oil importer, also reported its first omicron case.

Oil prices have come under demand pressure from uncertainties about the COVID-19 omicron variant, the severity of which is still unclear.

The World Health Organization said Sunday that early data suggests that omicron is more transmissible than the delta strain, reduces vaccine efficacy but causes less severe symptoms.

"While preliminary findings from South Africa suggest it may be less severe than delta, and all cases reported in the EU/EEA to date have been mild or asymptomatic, it remains unclear to what extent omicron may be inherently less virulent," the WHO said.

However, Ozlem Tureci, one of BioNTech's two Turkish-German co-founders, told a news conference on Dec. 8 that preliminary laboratory studies demonstrated three doses of the Pfizer-BioNTech COVID-19 vaccine neutralized the omicron variant of the coronavirus.

Amid the omicron outbreak, the Organization of the Petroleum Exporting Countries (OPEC) kept its global oil demand forecast for 2021 and 2022 unchanged.

"The impact of the new omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges. This is in addition to a steady economic outlook in both the advanced and emerging economies," OPEC said in its monthly oil market report on Monday.

The Asian Development Bank on Tuesday cut its growth forecasts for developing Asia for 2021 and 2022 due to the uncertainty and risks brought on by the omicron variant.

Investors are now awaiting US crude oil inventory data from the American Petroleum Institute that will be released later in the day.