Title: Oil prices steady as Omicron caution lingers

Dec 22, 2021 06:07AM ET

By: AnalysisWatch

Oil costs were consistent on Wednesday as fears of tight inventory were balanced by COVID-19 concerns later Singapore suspended travel without isolation and Australia increased immunization determination because of a flood in Omicron variation cases.

West Texas Intermediate (WTI) crude futures in the United States rose 37 cents, or 0.55%, to $71.49 per barrel at 1050 GMT, following a 3.7% gain on Tuesday.

Brent crude futures rose 28 cents, or 0.40%, to $74.26 a barrel after rising 3.4% in the previous session.

Moderna CEO Stephane Bancel said on Tuesday the vaccine maker expected no problems in developing a booster vaccine to protect against the Omicron variant and could start work in a few weeks.

Another positive indicator is that crude oil inventories in the US fell more than expected last week.

According to the American Petroleum Institute, U.S. crude inventories fell by 3.7 million barrels in the week ended December 17, while eight analysts polled by Reuters had expected a decline of 2.8 million barrels.

Weekly data from the U.S. Energy Information Administration is due later on Wednesday.

However, mobility restrictions around the world again stoked fears of a drop in fuel demand.

Germany, Ireland, the Netherlands, and South Korea are among the countries that have imposed partial or full closures or other social distancing measures in recent days.

The Singapore government has announced a freeze on the sale of new airline and bus tickets from December 23 to January 20 in the city-state, citing Omicron's risks.

On the supply side, investors are looking ahead to the OPEC+ producer group meeting on January 4th.

With growing production problems in Russia and several other countries in the Atlantic basin, it is likely that Middle Eastern producers could push for a continuation of monthly quota increases, consultancy JBC Energy said in a note.