Oil prices rose slightly on Tuesday, but investors are still worried about the rapid spread of Omicron coronavirus variants around the world, prompting countries to consider more restrictive measures, which may weaken fuel demand.
At 0105 GMT, Brent crude oil futures rose 9 cents, or 0.1%, to $71.61 per barrel, while U.S. West Texas Intermediate (WTI) crude oil futures rose 23 cents, or 0.3%, To 68.84 US dollars per barrel.
“It also looks increasingly likely that the UK will reimpose restrictions sometime after Boxing Day (Dec 26), with daily cases moving to record highs,” analysts from JBC Energy wrote in a note on Tuesday.
British Prime Minister Boris Johnson said on Monday he would tighten coronavirus curbs to slow the spread of the Omicron variant if needed, after the Netherlands began a fourth lockdown and other European nations considered Christmas restrictions.
Omicron infections have rapidly increased exponentially in Europe and the United States, doubling every two to three days in London and elsewhere, and dealt a heavy blow to financial markets that are worried about the impact on the global economic recovery.
Still, Moderna Inc said on Monday that a booster dose of its COVID-19 vaccine appeared to be protective against the fast-spreading Omicron variant of the coronavirus in laboratory testing, providing some hope to investors.
On the supply front, OPEC+ compliance with oil production cuts rose to 117% in November from 116% a month earlier, two sources from the group told Reuters, indicating production levels remain well below agreed targets.
In the United States, crude oil inventories were expected to have fallen for a fourth consecutive week, while distillate and gasoline stockpiles likely rose last week, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of reports from the American Petroleum Institute, an industry group, due on Tuesday, and the EIA, the statistical arm of the U.S. Department of Energy, due on Wednesday.