Oil slid in a tight range on Friday as it headed for its biggest weekly gain since late August, as concerns over global growth and the Omicron coronavirus variant on fuel demand boosted market sentiment.
Brent and WTI are on track to post their strongest gains in 15 weeks, up more than 6% this week.
Brent crude futures fell 6 cents to $74.36 at 0419 GMT after falling 1.9% on Thursday.
West Texas Intermediate (WTI) crude futures rose 2 cents, or 0.03%, to $70.96 a barrel after falling 2% in a volatile session the previous day.
Earlier in the week, the oil market regained nearly half of its losses since the Nov. 25 Omicron outbreak. Omicron fears are waning and risk appetite is returning, as initial research suggests Pfizer’s three-dose PFE.N vaccine offers protection against the Omicron variant.
The market is still under control and there is still ongoing concern whether the Omicron variant will be able to enforce border movement restrictions during the Christmas and New Year’s holidays season.
Also, headlines about a Japanese study showing Omicron to be more than four times more contagious than the Delta variant are triggering some sales.
China’s domestic air traffic is floundering on a zero-COVID policy after repeated minor outbreaks have eroded consumer confidence, following a rapid recovery amid pandemic.
Fitch downgraded two Chinese real estate firms. The rating agency downgraded property developers China Evergrande Group and Kaisa Group, saying they defaulted on their offshore bonds. This has reinforced fears of a potential slowdown in China’s real estate sector and its broader economy with its role as the world’s largest oil importer.
A strengthening dollar ahead of US inflation data to be released later on Friday also put pressure on oil prices as oil became more expensive for holders of other currencies.
Inflation figures are expected to lead to a push for rate hikes in the US as early as March 2022.
