Oil prices increased more than 3% during the week ending Dec. 31, as COVID-19 omicron variant shows milder symptoms however it spreads faster, raising fears of new curbs and lower fuel demand.
International benchmark Brent crude traded at $78.81 per barrel at 1155 GMT on Friday, posting a 3.26% gain from the Monday session that opened at $76.32 a barrel.
American benchmark West Texas Intermediate (WTI) registered at $76.25 per barrel at the same time on Friday, increasing 3.91% relative to the opening price of $73.38 a barrel on Monday.
Oil market started the last week of 2021 with reports that airlines in the US canceled nearly 1,000 flights on Sunday and 800 more flights on Monday in addition to around 1,500 flights since Friday as the omicron variant of COVID-19 spreads quickly, increasing the number of sick calls from pilots.
Causing concerns about travel disruptions over the major holiday weekend, which carriers expected to be among the busiest days of the year, the flight cancellations put downward pressure on oil prices.
Although health authorities said COVID-19 patients with omicron variant are showing only mild symptoms, the US and several European countries have reported the largest daily increases in Covid cases since the pandemic began.
A number of cities including Paris, London and Berlin have cancelled official New Year's celebrations while Italy banned outdoor events and closed nightclubs.
Despite larger-than-expected drop in the US crude oil inventories which signals a recovery in crude demand in the US, prices posted limited drops on Friday due to investor fear about uncertainties around omicron variant and its possible effects on oil demand Outlook in 2022.
US commercial crude oil inventories decreased by 0.8% during the week ending Dec. 24, according to the latest data released by the Energy Information Administration (EIA).
Inventories fell by 3.6 million barrels to 420 million barrels, exceeding the market expectation of a 3.2 million-barrel drop.
-Investors eyeing for OPEC+ meeting on Jan. 4
Supply disruptions in Ecuador, Libya and Nigeria also provide support on prices.
Ecuador's state-owned pipeline SOTE has ruptured due to erosion in the Amazon region.
In Libya, country's National Oil Company (NOC) said more than 300,000 bpd of crude production is shut in at fields in the western part of the country by the Petroleum Facilities Guard (PFG), a paramilitary unit tasked with protecting NOC's assets and facilities.
In Nigeria, Royal Dutch Shell declared 'force majeure' on Nigerian Forcados crude oil deliveries after a faulty barge obstructing tanker traffic last week.
Investors are also monitoring the upcoming meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on Jan. 4. The group will decide whether to increase output by 400,000 barrels per day (bpd) in February.
The OPEC+ producers in their previous meeting agreed to stick to the scheduled output scheme ignoring requests from some countries including the US to raise the production.
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr