Oil slid for a sixth straight week, marking the longest stretch of weekly declines since 2018, as the Omicron variant of SARS-CoV-2 jolts markets and OPEC+ continues to hike supply.
West Texas Intermediate for January delivery declined 0.36 percent to US$66.26 a barrel, down 2.77 percent from a week earlier.
Brent crude for February delivery rose 0.3 percent to US$69.88 a barrel, posting a weekly decline of 3.9 percent.
Photo: Reuters
The spread of the Omicron variant has investors concerned about any potential damage to demand as the US reported at least six states with cases. COVID-19 infections in South Africa have almost quadrupled since Tuesday.
Meanwhile, OPEC and its allies this week decided to add 400,000 barrels a day of crude to global markets next month, ultimately bowing to consumer pressure.
“The short-term demand outlook was shaky at best, and if the US sees new restrictions, the oil market could see a supply surplus by the end of the month,” Oanda Corp senior market analyst Edward Moya said.
Crude has dropped sharply since late October amid moves by major consuming nations to tap their reserves and the emergence of the new virus variant.
The sharp increase in volatility has oil traders heading for the exit, with open interest across the main oil futures contracts plunging to its lowest level in years.
While OPEC+ decided to continue supplying the market with barrels, the group essentially placed a floor under prices by giving itself the option to change the plan at short notice.
Prior to this week’s meeting, ministers said that they were concerned about the effect of Omicron on crude demand, but were struggling to figure out how serious the new strain would become.
By effectively keeping its monthly meeting open, the alliance now has more flexibility to address price swings.
Additional reporting by staff writer
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