#Futures Movers: Oil prices suffer a weekly loss as omicron continues to spread

“The spread of the new variant has been quite incredible, doubling every two days in some countries,” he said, and in the U.S. more companies have canceled year-end events and are urging workers to work from home.

France on Thursday imposed fresh restrictions on travelers from the U.K. in response to the spread of the omicron variant. The U.S. is reporting more than 120,000 new cases of COVID-19 a day, up more than 40% from two weeks ago, according to a New York Times tracker.

“However, airlines are not reporting a sharp drop in cancellations just yet, as people still seem intent to make the best of things, confident that they will be protected by vaccines and assured that accompanying symptoms — in the event that they do get sick— should be relatively mild,” said Meir.

Read: Why 2022 will be a ‘more challenging’ year for commodities such as oil and gold

Also see: Why U.S. oil production hasn’t rebounded along with crude prices

West Texas Intermediate crude for January delivery
CL00,
-2.00%

CLF22,
-2.11%
fell $1.52, or 2.1%, to settle at $70.86 a barrel on the New York Mercantile Exchange, pulling the U.S. benchmark down by 1.1% for the week, according to Dow Jones Market Data. February Brent crude
BRN00,
-0.07%

BRNG22,
-0.07%,
the global benchmark, lost $1.50, or 2%, at $73.52 a barrel on ICE Futures Europe, for a 2.2% weekly decline.

Both WTI and Brent crude have now registered weekly losses for seven out of the last eight weeks.

“Omicron demand concerns and the movement of the U.S. dollar are very much dictating current moves in oil prices — and will likely set the tone over the holiday period,” Matt Smith, lead oil analyst, Americas, at Kpler, told MarketWatch. “Countering this negative impact on sentiment is the likelihood of oil getting swept up in a Santa rally across risk-on assets,” he said.

But U.S. petroleum markets should be supportive for prices, as gasoline demand is looking strong for the holiday period while oil inventories are set to draw into year-end,” said Smith.

China remains an influence too, he said. On the supportive side, “it is boosting crude imports and building onshore inventories again, while from a bearish perspective strict lockdowns are impacting mobility.”

“Pollution controls look set to quell crude demand ahead of the Olympics as refiners throttle back on activity, while fuel switching from coal to diesel for power generation could instead boost product demand,” Smith said.

Prices for petroleum products also declined Friday. January gasoline
RBF22,
-1.02%
lost 2.6% to $2.122 a gallon, for a weekly decline of 0.7%, and January heating oil
HOF22,
-1.59%
fell about 2.1% to $2.22 a gallon, ending 1.4% lower for the week.

January natural gas
NGF22,
-2.50%
settled at $3.69 per million British thermal units, down 2% for the session, with prices marking a weekly loss of 6%.

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