US Oil Tumbles Beneath $70 on Weaker Demand Warning By Investing.com – Investing.com

US Oil Tumbles Beneath $70 on Weaker Demand Warning By Investing.com – Investing.com

© Reuters.

By Barani Krishnan

Investing.com - Oil prices tumbled for a second day in a row on Tuesday, with the U.S. crude benchmark falling beneath the key $70 per barrel support, on a weaker demand outlook by the International Agency due to the Omicron variant of Covid.

Global oil markets have returned to a surplus and face an even bigger oversupply early next year as the Omicron hits international travel, the IEA said, cutting its forecast for global oil demand in the first quarter by 600,000 barrels a day.

The warning came on the same day that China confirmed its first Omicron case. Given Beijing’s much-publicized zero-tolerance policy to new Covid outbreaks and the variant’s high transmissibility, this could result in the fresh closures of factories and workplaces in the world’s largest crude importer.

The Asian Development Bank, meanwhile, trimmed on Tuesday its 2022 growth forecasts for the region from Covid-related risks and uncertainty.

The IEA revised down its demand outlook by 100,000 barrels per day for both the remainder of this year and 2022. “The surge in new Covid-19 cases is expected to temporarily slow, but not upend, the recovery in oil demand that is under way,”