Oil prices fell on Monday as demand concerns fueled by the rapid global rise in infections of the Omicron variant of the coronavirus outweighed concerns about Kazakhstan’s oil supply.
The crude Brent fell 88 cents, or 1.08%, to $ 80.87 a barrel., while the West Texas Intermediate (WTI) from United States dropped 67 cents, or 0.85%, to $ 78.23 per barrel. Both contracts were up about 50 cents in the first trades of the day.
Stock markets again underperformed, while the 10-year Treasury yield hit a two-year high as investors downsized risk assets on bets that the US Federal Reserve might raise interest rates in March.
Omicron variant concerns took over the oil market, pushing prices lower.
Oil prices jumped 5% last week, after protests in Kazakhstan disrupted rail lines and hit production at the country’s main oil field, Tengiz, while maintenance of pipelines in Libya brought pumping down to 729,000 barrels per day from a peak of 1.3 million bpd last year.
Kazakhstan’s largest oil company Tengizchevroil (TCO) is gradually increasing production to reach normal rates in the Tengiz field after protests limited production there in recent days, operator Chevron said on Sunday.
Libyan production increased on Monday, which weighed on prices.
OPEC production in December increased by 70,000 bpd from the previous month, compared to the 253,000 bpd increase allowed under the OPEC + supply agreement, which has gradually lifted the production cuts applied in 2020 when demand collapsed below quarantines to stop the spread of Covid-19.