WTI Crude Falls Sharply As Lockdowns Looming

Crude oil prices fall during Thursday’s session after rallying for six weeks, retreating by 2.82%. COVID-19 restrictions, and the spread of the Omicron variant, dented market mood as oil demand cut are among factors that are dragging prices lower.

The factors together hit oil prices as lockdowns loom as a number of countries taper some of their crude reserves with the aim to ease energy prices. The US crude oil benchmark WTI falls during the New York session, trading at $70.34.

The market is still in calibration mode around the virus. At the beginning of the week, global shares and oil rallied, on the back that the newly discovered strain only cause mild symptoms. However, 19,842 new cases reported from South Africa on December 8 increased the traders’ concerns.

So, it is natural that investors and traders are now favouring safe-haven assets as they waited for additional Omicron-related information.

During the day, Western Texas Intermediate peaked above December 8 cycle high at $73.17, retreating towards the $70.50s area amid dented market sentiment.

In the meantime, the US Dollar Index, which price influences commodities quoted in US dollars, is up 0.34%, sitting at 96.24, a headwind for WTI.