Omicron raises panic in the oil markets and reinforces fears of declining demand | Market talk

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Crude oil futures closed lower on Wednesday, as an early rally faded and selling increased amid concerns that the new Omicron strain of the Corona virus may reduce demand for oil as global supply increases.

Late in the session, oil prices fell into negative territory after US officials said that the United States had detected the first case of infection on its soil for the Omicron strain, which is believed to be more transmissible than its predecessors.

West Texas Intermediate crude futures ended the trading session down 61 cents, or 0.9 percent, to settle at $65.57 a barrel. During the session, contracts rose as much as 4 percent.

Brent crude futures closed down 36 cents, or 0.5 percent, at $68.87 a barrel.

Oil futures contracts have been under pressure for weeks due to factors ranging from the new strain of the Corona virus to the US decision to draw from emergency oil reserves along with other countries.

Brent and West Texas Intermediate contracts for the month of November recorded their largest monthly decline in percentage terms since March 2020, with Brent crude down 16 percent and WTI down 21 percent.

Government data showed that US gasoline stocks rose by four million barrels last week to 215.4 million barrels, far exceeding analyst expectations, in parallel with the decline in the total gasoline supplied by refineries. On a four-week basis, gasoline demand remains in line with pre-pandemic levels.

The data showed that crude stocks fell by 910,000 barrels per week, compared to expectations for a decline of 1.2 million barrels.





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