Oil prices are mixed, US oil falls after flight cancellations due to COVID-19 Reuters


© Reuters. FILE PHOTO: Oil Pump Cranes Shown at Kern River Oil Field in Bakersfield, California, November 9, 2014. REUTERS / Jonathan Alcorn

Authors Florence Tan and Koustav Samanta

SINGAPORE (Reuters) – Oil prices were mixed on Monday, with Brent rising higher as futures fell after airlines cut off thousands of flights to the United States over the Christmas holidays amid rising COVID-19 infection.

West Texas Intermediate crude futures fell 63 cents, or 0.9%, to $ 73.16 a barrel by 05:10 GMT. The contract was not traded on Friday because the American markets were closed due to the Christmas holidays.

it rose 20 cents, or 0.3%, to $ 76.34 a barrel after falling 0.92% on Friday.

Both contracts jumped 3% to 4% last week after early data suggested that Omicron variant COVID-19 could cause milder disease levels.

However, the highly transmissible variant is causing an increase in COVID-19 cases worldwide.

In the last three days, thousands of passengers traveling during Christmas got stuck after U.S. airlines canceled flights due to a lack of COVID-related staff.

“Smaller travel equals lower economic activity in the U.S. equals lower WTI value, the U.S. oil measure,” said OANDA analyst Jeffrey Halley.

Oil markets generally remain cautious about short-term demand, market observers said.

“Although Omicron is spreading even faster than any variant of COVID-19, the relatively relieving news is that most people infected with Omicron are showing mild symptoms, at least so far,” said Leona Liu, an analyst at Singapore’s DailyFX. .

“Still, oil prices have suffered concerns about Omicron, but the pressure on the negative decline could ease if the variant proves to be milder,” she added.

In Europe, prices hit record highs last week due to limited inventories, backing Brent oil prices.

Russian President Vladimir Putin said on Friday that the European Union can only blame its own policy for record gas prices, saying some of its members are reselling cheap Russian gas at much higher prices within the bloc.

Looking ahead, oil investors are focused on the next OPEC + meeting on 4 January.

The Organization of the Petroleum Exporting Countries (OPEC and allies including Russia, known as OPEC +, will meet to decide whether to continue to increase production by 400,000 barrels per day (bpd) in February).

Russia believes oil prices are unlikely to change significantly next year, and demand will recover to pre-pandemic levels only by the end of 2022, Deputy Prime Minister Alexander Novak said on Friday.

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