| At 9:56 am Singapore time (0156 GMT), the ICE February Brent futures contract was down 18 cents/b (0.24%) from the previous close to $74.21/b, while the NYMEX January light sweet crude contract fell 14 cents/b (0.2%) at $71.15/b. Oil markets saw choppy trading during the Dec. 13 session, as risk-on sentiment earlier in the day was later overshadowed by growing concerns of a hit to oil demand from the omicron variant. Despite rising by close to 2% in the Asian session Dec. 13, crude prices later pared gains to end the day in the red.
The declines came as the UK Dec. 13 reported its first death from the omicron variant, while the government warned of a “tidal wave” of omicron infections soon to come. Meanwhile, an increasing number of companies in Europe were urging staff to work from home. In China, authorities Dec. 13 reported the first confirmed case of the variant on the country’s mainland, increasing the chances Beijing could institute broad lockdowns in line with its “zero-COVID” policy. (S&P Global Platts)
Still, analysts were optimistic that any sustained hit to oil demand would be met by a response from the OPEC+ producer group. The group had left open the possibility of making “immediate adjustments” to its monthly output hike at its last meeting in early December. Conflicting sentiments were also seen in OPEC’s latest monthly oil market report. The group Dec. 13 sharply raised its forecast for oil demand in the first quarter of 2022, narrowing a projected oversupply, as it expects the omicron variant to have a transitory impact on the global economy. It now sees the world consuming 99.13 million b/d of oil in the first three months of 2022, an increase of 1.1 million b/d from its forecast last month. (S&P Global Platts)
OIL MARKET ROUND-UP: (Bloomberg)
* OPEC Boosts First Quarter Demand View as Omicron Risk Seen Muted
* Asia’s Big Winter Power Switch Averted as Inventories Expand
* Iraq Raises Basrah Medium Crude Price to Asia and Excludes Light
* Saudi Oil Minister Says Global Output May Plunge This Decade
* Oil Producers Artificially Adjusting Supply Below Demand: India
* U.S. Expects Permian Oil Output to Rise to Record in December
* U.S. November Drilled, Uncompleted Wells Fall to 4,855: EIA
* EIA Sees U.S. Shale-Oil Rising 96K B/D to 8.44M B/D in Jan.
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