Oil prices fell more than 2% on Monday as increased cases of the Omicron coronavirus variant in Europe and the United States amid investors’ concern that new restrictions on businesses to combat the spread could impact fuel demand.
Brent crude futures fell $1.92, or 2.6%, to $71.60 a barrel, while West Texas Intermediate (WTI) crude futures fell $2.09, or 3%, to $68.77 a barrel.
Fears of impending lockdown on economic activity to contain the increasing worldwide spread of the COVID-19 Omicron variant could increase the risk of demand slowdown.
The Netherlands is on lockdown on Sunday, and the possibility of further COVID-19 restrictions looming ahead of the Christmas and New Year holidays has appeared in several European countries.
Meanwhile, US energy companies added oil and gas rigs for the second week in a row this week.
Baker Hughes said in Friday’s report that the number of oil and gas rigs, an early indicator of future production, rose three weeks to 579 through December 17, the highest level since April 2020.
According to a three-month export calendar, oil exports and transit from Russia planned as 56.05 million tons in the first quarter of 2022 are expected to be lower than 58.3 million tons which was in the fourth quarter of 2021.
State-backed refineries in China increase oil processing rates and local supply is prioritized to alleviate fuel shortages, while diesel exports fell 69% in November from a year ago.