Oil prices rebounded earlier this week after crashing last week amid growing optimism that the new Omicron variant won’t cause major economic damage.
Oil prices took a breather after two days of gains on Wednesday as investors await assessments of the full impact of the Omicron coronavirus strain on the global economy and fuel demand, as well as the effectiveness of available vaccines.
Brent crude futures fell 19 cents, or 0.3%, to $75.25 a barrel at 0519 GMT after gaining 3.2% on Tuesday.
West Texas Intermediate (WTI) crude was down 23 cents, or 0.3%, to $71.82 a barrel, after gaining 3.7% in the previous session.
The recovery run took a break as investors tried to confirm the full impact of the Omicron variant before buying more.
Meanwhile, there are rumors that drugmaker Pfizer and its partner BioNTech’s COVID-19 vaccine is partially effective, and antibody-based COVID-19 therapy is effective against all mutations of the Omicron variant.
However, investors are still not entirely optimistic and are taking a wait-and-see approach for now.
The market also focuses on the Iranian nuclear talks, tensions between Russia and Ukraine, and winter weather conditions in the northern hemisphere.
The United States warned Russian President Vladimir Putin on Tuesday that it would apply “strong economic and other measures” to Russia if the West invaded Ukraine, while Putin demanded assurances that NATO would not expand further eastward.
Indirect talks between Washington and Tehran on reinstating the nuclear deal resumed a week ago, but are scheduled to resume on Friday after a pause when Western officials voiced concerns over Iran’s sweeping demands.
Oil markets reacted little to the US weekly inventory data. U.S. crude inventories fell last week, while gasoline and distillate stocks rose, according to market sources based on Tuesday’s figures from the American Petroleum Institute (API).