Oil prices decreased more than 2% during the week ending Dec. 17, as surging cases of the COVID-19 omicron variant raised fears of new curbs and lower fuel demand.
International benchmark Brent crude traded at $73.69 per barrel at 1155 GMT on Friday, posting a 2.22% decrease from the Monday session that opened at $75.37 a barrel.
American benchmark West Texas Intermediate (WTI) registered at $71.08 per barrel at the same time on Friday, declining 1.33% relative to the opening price of $72.04 a barrel on Monday.
The markets started the week on a positive note on Monday with the easing of concerns over the impact of the new COVID-19 omicron variant on the global economic recovery and fuel demand.
Prices continued rising based on indicators that the omicron variant is so far showing only mild symptoms while scaling back restrictions.
Amid the omicron outbreak, the Organization of the Petroleum Exporting Countries (OPEC) kept its global oil demand forecast for 2021 and 2022 unchanged.
'The impact of the new omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges,' OPEC said in its monthly oil market report on Monday.
However, on Tuesday, prices came under demand pressure from doubts on the outcome of the omicron, the severity of which is still unclear.
The Asian Development Bank, early on Tuesday, cut its growth forecasts for developing Asia for 2021 and 2022 due to the uncertainty and risks brought on by the omicron variant.
The International Energy Agency (IEA), in its oil market report published later in the day, revised down its global oil demand estimates for 2021 and 2022 due to the new containment measures put in place to halt the spread of the virus, which are projected to have an immediate impact on air travel and jet fuel consumption.
'A new surge in COVID-19 cases is expected to slow, but not derail, the recovery in oil demand that is underway,' the IEA said.
With global supply growth expectations outpacing demand growth, oil markets came under further pressure. The IEA foresees global oil production outpacing demand from December with the US and OPEC+ led by Saudi and Russia ramping up more output.
Late Wednesday, the Energy Information Administration (EIA) said that US commercial crude oil inventories decreased by 4.6 million barrels during the week ending Dec. 10, far exceeding the market expectation of a 2.6 million-barrel fall.
Gasoline stocks in the country also declined by 700,000 barrels midweek. Despite an increase in Covid-19 cases, the drop in US crude and gasoline inventories indicated strong demand, increasing oil prices.
However, the end of the week concluded in negative market sentiment with reports of more cases of the omicron variant across Europe, where countries are bracing for the new virus wave and weighing additional measures to curtail its spread.
Meanwhile, the market is also closely watching developments before the next meeting of the OPEC and its allies, known as OPEC+, on Jan. 4.
At the previous meeting on Dec. 2, the cartel agreed to raise output by 400,000 barrels per day in January. However, they did not rule out holding urgent meetings to review their policy depending on pandemic developments.
By Firdevs Yuksel
Anadolu Agency
energy@aa.com.tr