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Oil prices plunge as Omicron's rapid spread dims fuel demand outlook

Oil prices drop 2% as rapid Omicron spread dims fuel demand outlook
Oil prices drop 2% as rapid Omicron spread dims fuel demand outlook   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Stephanie Kelly</p> <p><span class="caps">NEW</span> <span class="caps">YORK</span> – Oil prices slumped on Monday as surging cases of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new restrictions to combat its spread could dent fuel demand. </p> <p>Brent crude futures fell $2, or 2.7%, to settle at $71.52 a barrel, while U.S. West Texas Intermediate (<span class="caps">WTI</span>) crude futures fell $2.63, or 3.7%, to settle at $68.23 a barrel.</p> <p>Brent fell to a session low of $69.28 per barrel, while <span class="caps">WTI</span> sank to $66.04 per barrel, both their lowest levels since early December. </p> <p>“This is a knee-jerk reaction to the proliferation of the virus and the fear that lockdowns can rapidly spread,” said Andrew Lipow of Lipow Oil Associates in Houston. </p> <p>The Netherlands went into lockdown on Sunday and the possibility of more <span class="caps">COVID</span>-19 restrictions being imposed ahead of the Christmas and New Year holidays loomed over several European countries. </p> <p>U.S. health officials urged Americans on Sunday to get <span class="caps">COVID</span>-19 booster shots, wear masks and be careful if they travel over the winter holidays, with the Omicron variant raging across the world and set to take over as the dominant strain in the United States.</p> <p>Oil prices fell despite Moderna Inc’s announcement on Monday that a booster dose of its <span class="caps">COVID</span>-19 vaccine appeared to be protective against Omicron in laboratory testing.</p> <p>Meanwhile, <span class="caps">OPEC</span>+ compliance with oil production cuts stood at 117% in November, up 1 percentage point from the previous month, two sources from the group told Reuters, as output continues to lag agreed targets.</p> <p>In the United States, energy companies added oil and natural gas rigs for a second week in a row. </p> <p>The oil and gas rig count, an early indicator of future output, rose by three to 579 in the week to Dec. 17, representing its highest number since April 2020, energy services business Baker Hughes Co said in its closely followed report on Friday.</p> <p/> </div>