Oil prices dropped this Monday, December 27, as WTI crude’s price fell by 1.2% to USD 72.94 a barrel, and Brent crude showed a slight increase by 0.1% to USD 76.25.
This decline in oil prices can be attributed to flights being canceled over the weekend, where more than 1,300 US flights were canceled.
The outbreak of the Omicron variant worldwide resulted in over 7,000 flights being canceled and thousands of flights being delayed around the world during the Christmas holiday weekend, according to a website that specializes in tracking air traffic, on Sunday, December 26.
“Lower travel equalling lower economic activity in the US equals lower WTI,” said Jeffrey Halley, an analyst at a Forex brokerage firm, OANDA, noting, “the disruption to goods and services from isolating workers, notably air travel, seems to be the main fallout so far,” he added.
Recently, the International Energy Agency (IEA) said that it expects oil supply to top demand, following increasing worries among countries about the rapid 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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