Title: Oil steadies near $75 as investors assess Omicron's impact

Dec 08, 2021 05:05AM ET

By: AnalysisWatch

Oil prices stabilized near $75 a barrel on Wednesday, taking a breather after strong gains earlier in the week as investors continued to assess the impact of the Omicron coronavirus on the global economy and fuel demand.

Brent crude futures fell 19 cents, or 0.25%, to $75.25 a barrel at 0925 GMT, after rising 3.2% on Tuesday. US West Texas Intermediate crude was at $71.78 a barrel, down 27 cents, or 0.4%, after rising 3.7% in the previous session.

After falling more than 16% since 25 November to around $69 a barrel, Brent crude prices have recovered nearly 10% since 1 December on signs that Omicron has so far had a limited impact on oil demand.

The Omicron variation has been accounted for in 57 nations, with COVID cases expanding in southern Africa, including Zimbabwe, and the number of patients requiring hospitalization prone to ascend as the illness spreads, the World Health Organization said on Wednesday.

The market also focused on rising geopolitical tensions as talks between Washington and Tehran over Iran's nuclear program were due to resume this week and Western officials expressed dismay at Iran's far-reaching demands.

An easing of US sanctions is expected to lead to an increase in Iranian oil exports, which could put pressure on oil prices.

Meanwhile, tensions remained high between Western powers and Russia over Ukraine after President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose "strong economic and other measures" on Russia if it invaded Ukraine, while Putin demanded guarantees that NATO would not expand further east.

Oil markets reacted little to the weekly US inventory data.

US crude inventories fell last week while gasoline and distillate stocks rose, market sources said, citing figures from the American Petroleum Institute on Tuesday.

Analysts polled by Reuters forecast a second consecutive weekly decline in US crude inventories.