Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Trims Weekly Gain as Thin Trading Volumes Boost Volatility

Published 24/12/2021, 08:40
Updated 24/12/2021, 08:40
© Reuters.

© Reuters.

(Bloomberg) -- Brent oil fell as as trading volumes thinned moving into the holiday period, but was still heading for a weekly gain on signs that the omicron variant of the virus may be less severe than previous strains.

Futures in London slipped 0.5% toward $76 a barrel on Friday. While omicron has led to some travel restrictions and surging infections, a U.K. health agency said the variant was less likely to lead to hospitalizations, compared with the delta strain. The market has been susceptible to greater volatility and wild price swings this week due to lower trading volumes.

Oil is heading for a yearly gain after a robust rebound from the pandemic but the rally has faltered recently, in part due to concerns about omicron. There are some signs of tightening emerging, however, with supply disruptions in Libya and Nigeria. An energy crunch in Europe is also raising the prospect that more oil products will be needed for power generation.

“If the omicron variant is indeed less deadly, then the economic recovery won’t be derailed and oil consumption will rise into 2022,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte. “The news flow around omicron makes conditions perfect for an oil price rally.”

Omicron appears to be less severe but more contagious than any other strain to date, the U.K. Health Security Agency said Thursday. An individual infected with the variant is 50% to 70% less likely to be admitted to hospital, compared with the delta strain, the agency said.

The U.S., meanwhile, awarded a second batch of crude oil from the strategic reserve to Marathon Petroleum Corp (NYSE:MPC). as part of the Biden administration’s effort to lower energy costs. South Korea on Thursday became the first Asian consumer to follow through with a pledge to tap emergency stockpiles under the coordinated initiative.

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.