By Adedapo Adesanya
Oil prices rebounded more than 3% on Tuesday after falling sharply in the previous session as investor risk appetite improved as the market continued to monitor the rapid spread of the Omicron coronavirus variant worldwide.
Brent crude rose $ 2.47 or 3.45% to trade at $ 73.99 a barrel while US West Texas Intermediate (WTI) rose $ 2.57 or 3.75% for s ‘set at $ 71.18 per barrel.
Crude prices are rebounding after several countries in Europe considered further restrictions on movement as the fast-moving Omicron variant swept the world days before Christmas, landing the oil market in bearish territory.
The rapidly growing number of Omicron cases around the world has raised fears in the oil market for another period of low demand, with the new strain already becoming the dominant COVID variant in the United States.
Despite early indications that Omicron is less lethal, the market will still have to wait until the end of this period of further bearishness before it can regain its bullish sentiment.
In the Netherlands, urban centers were largely deserted as the country entered an instant lockdown that upended people’s Christmas plans.
Prime Minister Mark Rutte announced the closure on Saturday evening, ordering the closure of all stores except essentials, as well as restaurants, hairdressers, gymnasiums, museums and other public places from at least Sunday to January 14.
Omicron, a highly contagious variant first detected last month in southern Africa and Hong Kong, has been around the world and has been reported in 89 countries, the World Health Organization (WHO) said. .
Prices were also supported by the skirmishes in Libya which led to force majeure on oil exports and put upward pressure on prices.
The Libyan National Oil Company (NOC) said crude oil production had been halted in four of Libya’s oil fields, including the disputed one at El Sharara, which has a capacity of 300,000 barrels per day.
Other closed oil fields include El Feel, Wafa and Hamada. The oil fields were shut down by members of the Petroleum Facilities Guard (PFG), which is responsible for protecting the oil fields, according to the NOC.
The PFG would have closed a valve on a pipeline going from Sharara to the port of Zawiya, and another value from Wafa to Mellita.
Prices were also supported by news of US crude oil inventories falling for the fourth week in a row. The Energy Information Administration (EIA) will release its figure on Wednesday following an earlier publication by the industry watchdog, the American Petroleum Institute (API).