Oil Down as Omicron Fuel Demand Worries Persist By Investing.com

© Reuters.

By Gina Lee

Investing.com – Oil was down on Thursday morning in Asia, giving up some of its gains from the past two sessions, with uncertainty remaining over the near-term impact of the omicron COVID-19 variant on fuel demand.

edged down 0.17% to $85.53 by 10:46 PM ET (3:46 AM GMT) and edged down 0.15% to $82.52.

Wednesday’s showed a draw of 4.553 million barrels in the week to Jan. 7. Forecasts prepared by Investing.com predicted a 1.904-million-barrel draw, while a 2.144-million-barrel draw was reported last week.

released the day before, showed a draw of 1.077 million barrels.

“Gasoline demand was weaker-than-expected and still below pre-pandemic levels, and if this becomes a trend, oil won’t be able to continue to push higher,” OANDA analyst Edward Moya said in a note.

However, the omicron impact is expected to be short-lived, the note added.

The bigger-than-expected drawdown in crude inventories and the fact that stockpiles are at their lowest level since October 2018, had given the market a boost.

However, “in reality, the weekly EIA report was less bullish than the headline number, as total crude oil inventories fell 4.8 million barrels but were more than offset by a stock build across refined products,” Citi said in a note.

ANZ Research also pointed out that commercial flight numbers are 16% below 2019 levels for the week to Jan. 11. This was at least an improvement from the last week of December 2021, when numbers were down 20% on pre-COVID-19 levels, according to FlightRadar 24.

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