Oil prices recorded another drop this Friday, leading to weekly loss, as Brent crude futures dropped by 1.5% to USD73.88 a barrel at 9:52, and WTI crude futures fell by 1.5% to USD71.27 a barrel.
This weekly drop is mainly explained by raising fears linked to the rapid spread of the Omicron variant in many countries, resulting in less fuel demand.
Omicron cases are doubling every two days, in countries such as South Africa, France, the US, and the UK.
Many countries have imposed stricter health restrictions in order to curb this new variant’s spread, with Austria becoming the first western country to re-impose a full lockdown.
As a result of countries’ health restrictions, Fuel stocks rose by 6.6 million barrels, according to recent data, leading to an abundant supply and less demand as well as a noticeable drop in terms of gains.
Recently, the International Energy Agency (IEA) said on Tuesday that it expects oil supply to top demand due to countries’ concern about the surge of the Omicron variant.
“The surge in new COVID-19 cases is expected to temporarily slow, but not upend the recovery in oil demand that is underway,” according to IEA’s monthly oil report.
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