# Oil struggles to hold gains amid mixed demand view
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-01-13
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Oil prices slip amid Omicron variant uncertainty
Meta Description: Stay informed about the impact of the Omicron variant on oil prices worldwide. Discover how fuel demand is affected and what it means for the market.
URL: https://financedigest.com/oil-struggles-to-hold-gains-amid-mixed-demand-viewhtml

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By Sonali Paul

MELBOURNE (Reuters) – Oil prices slipped on Thursday, trimming big gains from the previous two sessions, amid uncertainty over near-term demand as cases of the highly contagious Omicron variant of the coronavirus surge around the globe.

U.S. West Texas Intermediate (WTI) crude futures slipped 20 cents, or 0.2%, to $82.44 a barrel at 0503 GMT, after climbing 1.7% in the previous session.

Brent crude futures shed 19 cents, or 0.2%, to $84.48 a barrel, after rising 1.3% on Wednesday.

Data from the U.S. Energy Information Administration on Wednesday showed fuel [demand has taken a hit](https://www.financedigest.com/euro-zone-likely-entering-recession-as-price-rises-hit-demand-pmi.html "Euro zone likely entering recession as price rises hit demand -PMI") from Omicron, with gasoline stockpiles increasing by 8 million barrels in the week to Jan. 7, compared with analyst [expectations for 2.4 million-barrel rise](https://www.financedigest.com/instant-view-us-may-payrolls-rise-up-than-expected.html "Instant View: US May payrolls rise up than expected").\[EIA/S\]

Gasoline demand was weaker-than-expected and still below [pre-pandemic levels](https://www.financedigest.com/fraport-sees-2023-passenger-traffic-at-80-90-of-pre-pandemic-levels.html "Fraport sees 2023 passenger traffic at 80-90% of pre-pandemic levels"), and if this becomes a trend, oil won’t be able to continue to push higher,” OANDA analyst Edward Moya said in a note.

However, Moya added, the [Omicron impact](https://www.financedigest.com/oil-gains-as-investors-see-limited-omicron-impact-on-demand.html "Oil gains as investors see limited Omicron impact on demand") is expected to short-lived.

The market had [earlier latched on to a bigger drawdown than expected](https://www.financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expected.html "Portuguese airline TAP swings to profit earlier than expected") in crude inventories and the fact that stockpiles are at their lowest since October 2018, pushing Brent and WTI to touch their highest in two months on Wednesday.

In reality, the weekly EIA report was less bullish than the headline number, as total crude oil inventories fell 4.8 [million barrels but were more than offset by a stock build across refined](https://www.financedigest.com/uks-superdry-in-talks-with-bantry-bay-to-refinance-85-million-facility.html "UK’s Superdry in talks with Bantry Bay to refinance million facility") products,” Citi said in a note.

ANZ Research pointed to commercial flight numbers running at 16% below 2019 levels for the week to Jan. 11. That was at [least better than in the last week](https://www.financedigest.com/80-of-brits-admit-to-feeling-hangry-at-least-once-a-week.html "80% of Brits admit to feeling “hangry” AT LEAST once a week") of December, when numbers were down 20% on pre-pandemic levels, according to FlightRadar 24.

Still, U.S. supplies are set to rise as producers are paving the way for [faster production by expanding](https://www.financedigest.com/forescout-and-fireeye-expand-partnership-enabling-faster-response-to-cybersecurity-threats.html "FORESCOUT AND FIREEYE EXPAND PARTNERSHIP, ENABLING FASTER RESPONSE TO CYBERSECURITY THREATS") well completions in the country’s top shale oil field, the Permian Basin of west Texas and New Mexico, according to research data.

(Reporting by Sonali Paul and Florence Tan; Editing by Tom Hogue)


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