SINGAPORE- Oil prices slumped by about 2 percent early on Monday as surging cases of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new restrictions on businesses to combat its spread may hit fuel demand.
Brent crude futures fell $1.36, or 1.9 percent, to $72.16 a barrel by 0036 GMT while US West Texas Intermediate (WTI) crude futures fell $1.51, or 2.1 percent, to $69.35 a barrel.
“Today’s Asia … weak sentiment in oil prices seems to go in line with a weakness seen in the S&P 500 and Nasdaq 100 e-mini futures,” said Kelvin Wong, market analyst at CMC Markets.
“(This is) due to fears of impending restrictions on economic activities to contain the current increasing spread of the COVID-19 Omicron variant worldwide which may increase the risk of demand slowdown.”
The Netherlands went into lockdown on Sunday and the possibility of more COVID-19 restrictions being imposed ahead of the Christmas and New Year holidays loomed over several European countries.
In the United States, White House medical adviser Dr. Anthony Fauci urged people travelling to visit loved ones to get booster shots and always wear masks in crowded public spaces.
Meanwhile, US energy firms this week added oil and natural gas rigs for a second week in a row.
The oil and gas rig count, an early indicator of future output, rose by three to 579 in the week to Dec. 17, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.
Still, lower exports are expected from Russia with exports and transit of oil from the country planned at 56.05 million tons in the first quarter of 2022 versus 58.3 million tons in the fourth quarter of 2021, a quarterly export schedule seen by Reuters showed on Friday.
Meanwhile, China’s crude oil imports from Saudi Arabia in November fell 13 percent from a year earlier, but the kingdom retained its ranking as the top supplier to the world’s biggest oil importer.
Inflows of Saudi Arabian oil to China reached 7.4 million tonnes last month, or 1.8 million barrels per day (bpd), data from the General Administration of Customs showed on Monday.
That compares with 1.67 million bpd in October and 2.06 million bpd in November last year.
The rising month-on-month imports were in line with the decision in July of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to increase output by 400,000 bpd a month until at least April 2022.
China’s imports in November from its second-biggest crude oil supplier, Russia, stayed at about a similar level from a month ago at 6.7 million tonnes, or 1.63 million bpd.
