Oil mixed while stopped flights roads and Omicron’s optimism supports

Petroleum pump jacks are pictured in the Kern River oil field in Bakersfield, California November 9, 2014. REUTERS / Jonathan Alcorn

LONDON, Dec. 27 (Reuters) – US oil fell on Monday after airlines canceled thousands of flights over the Christmas holidays amid growing cases of COVID-19, although Brent crude was backed by hopes that the Omicron variant would have limited impact on global demand.

More than 1,300 flights were canceled by US airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops. read more

US West Texas Intermediate (WTI) oil was down 85 cents, or 1.2%, to $ 72.94 a barrel at 1100 GMT. The US market was closed on Friday due to a public holiday. Global benchmark Brent oil rose 11 cents, or 0.1%, to $ 76.25.

“Lower travel equates to lower economic activity in the United States equates to lower WTI,” said Jeffrey Halley, an analyst at brokerage OANDA, who added that the divergence between Brent and WTI may reflect that global recovery is still on track.

“The disruption of goods and services by isolation workers, especially flights, seems to be the main effect so far,” he said of growing Omicron cases. “It will probably only cause short-term nerves, with the global recovery history for 2022 still on track.”

Brent has risen by more than 45% this year, supported by restored demand and supply cuts from the Organization of the Petroleum Exporting Countries (OPEC) and their allies, collectively known as OPEC +.

Oil, which plunged more than 10% on November 26 when reports of a new variant first appeared, rose last week after early data suggested that Omicron could cause a milder disease level.

“Although Omicron is spreading faster than any COVID-19 variant yet, the relatively soothing news is that most people infected with Omicron show mild symptoms, at least so far,” said Leona Liu, an analyst at Singapore-based DailyFX.

Talks resume today between world powers and Iran on reviving Tehran’s 2015 nuclear deal. Iran said on Monday that oil exports were the focus of talks, which so far appear to have made little progress in increasing Iran’s shipments. read more

Also on investors ‘radar is the next OPEC + meeting on 4 January, where the producers’ alliance will decide whether to proceed with a planned production increase of 400,000 barrels per day (bpd) in February.

OPEC + stuck to its plans at its last meeting to increase production for January despite Omicron.

Additional reporting by Florence Tan and Koustav Samanta Editing by David Goodman

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