Oil prices slide as Omicron variant clouds energy demand outlook – The National

Oil prices slide as Omicron variant clouds energy demand outlook – The National

Oil fell for the first time in three days over concerns about the demand effect from the Omicron variant and tighter monetary policy.

Futures in New York dropped below $72 a barrel after rising 2.3 per cent over the past two sessions. Daily Covid-19 cases in the UK have jumped to a record high, while hospital admissions have surged across the US. The Bank of England unexpectedly raised interest rates for the first time since the pandemic struck in a sign that inflation is now of bigger concern to leading central banks than the virus.

Signs are also emerging of softening oil demand in Asia, while the International Energy Agency said this week that the global market had returned to surplus as Omicron impedes travel. The weakness is showing up in the market’s structure, with Brent momentarily flipping into a bearish contango on Tuesday.