# Oil prices slide as rapid Omicron spread dims fuel demand outlook
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-12-20
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Oil Prices Slump 3% on Omicron Variant Surge - Market
Meta Description: Omicron variant cases trigger fears of demand slowdown, leading to 3% slump in oil prices. Restrictions and market analysis outlined.
URL: https://financedigest.com/oil-prices-slide-as-rapid-omicron-spread-dims-fuel-demand-outlookhtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-12-20t012800z1lynxmpehbj00zrtroptp4global-oil-2-1736836547429-compressed.jpg)

By Jessica Jaganathan

SINGAPORE (Reuters) -Oil prices slumped 3% on Monday as surging cases of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new restrictions on businesses to combat its spread may hit fuel demand.

Brent crude futures fell $2.14, or 2.9%, to $71.38 a barrel by 0747 GMT while U.S. West Texas Intermediate (WTI) crude futures fell $2.45, or 3.5%, to $68.41 a barrel.

“Today’s Asia … weak sentiment in [oil prices](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") seems to go in line with a weakness seen in the S&P 500 and Nasdaq 100 e-mini futures,” said Kelvin Wong, market analyst at CMC Markets.

(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](https://www.financedigest.com/investments-in-the-caribbean-increasing-due-to-cbi-demand.html "Investments in the Caribbean Increasing Due To CBI Demand") slowdown.

The Netherlands went into lockdown on Sunday and the possibility of more COVID-19 restrictions being imposed ahead of the [Christmas and New Year](https://www.financedigest.com/scam-special-how-to-avoid-christmas-shopping-fraud-this-year.html "Scam Special: How to Avoid Christmas Shopping Fraud this Year") holidays loomed over several European countries.

U.S. health officials urged Americans on Sunday to get booster shots, wear masks and be careful if they travel over the winter holidays, as the Omicron variant raged across the [world and was set](https://www.financedigest.com/uks-most-liveable-city-manchester-sets-its-sights-on-the-world-from-tourists-to-property-investors.html "UK’s most liveable city, Manchester sets its sights on the world, from tourists to property investors") to take over as the dominant strain in the United States.

Meanwhile, U.S. energy [firms this week added oil](https://www.financedigest.com/uk-oil-gas-firms-to-leave-years-worth-of-output-in-ground-with-tax-hikes-report.html "UK oil, gas firms to leave year’s worth of output in ground with tax hikes-report") and natural gas rigs for a second week in a row.

The oil and gas rig count, an [early indicator of future output](https://www.financedigest.com/french-sugar-makers-to-start-output-early-as-energy-curbs-loom.html "French sugar makers to start output early as energy curbs loom"), rose by three to 579 in the week to Dec. 17, its highest since April 2020, [energy services firm Baker](https://www.financedigest.com/french-energy-suppliers-will-let-struggling-bakers-renegotiate-contracts-le-maire.html "French energy suppliers will let struggling bakers renegotiate contracts – Le Maire") Hughes Co said in its closely followed report on Friday.

Still, lower exports are expected from [Russia with exports and transit of oil](https://www.financedigest.com/oil-prices-steady-as-news-of-saudi-russia-meeting-calms-investors.html "Oil prices steady as news of Saudi, Russia meeting calms investors") from the country planned at 56.05 million tonnes in the first quarter of 2022 versus 58.3 million tonnes in the fourth quarter of 2021, a quarterly export schedule seen by Reuters showed on Friday.

China’s diesel exports in November plunged 69% from a year ago as refineries prioritised domestic supply to ease a [fuel crunch with state-backed refineries having raised oil](https://www.financedigest.com/oil-spills-and-near-misses-more-ghost-tankers-ship-sanctioned-fuel.html "Oil spills and near misses: more ghost tankers ship sanctioned fuel") processing rates.

(Reporting by Jessica Jaganathan; Editing by Kenneth Maxwell)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---