Peter Nurse   

Investing.com — Monday’s decline in oil prices was caused by the U.K. suffering its first fatality from the Omicron version of the Covid-19 viruses. This prompted traders to reconsider the possibility that there would be longer-term mobility restrictions.

The futures fell 0.4% at $71.31/barrel by 9:00 AM ET (1400 GMT). 

U.S. U.S.

The crude benchmarks saw gains of around 8% last week. This was their first weekly gain since seven weeks. It is hoped that the Omicron variant would be less deadly for infected people than its predecessors.

According to the World Health Organization, Omicron coronavirus is a risky variant of Omicron coronavirus. The organization said it poses a high global threat and that evidence exists that suggests that this virus may not be protected. But, there are limited clinical data.

Boris Johnson, the U.K. Prime Minster, announced Monday that the Omicron coronavirus variant has claimed at least one death in Britain. 

Last week Johnson asked the public to work from home if possible and to wear masks on public transport, and then on Sunday he urged the country to get booster shots to prevent the health service from being overwhelmed, warning that a “tidal wave” of cases was approaching.

A more encouraging note is the Organization of the Petroleum Exporting Countries’ increase in its forecast of world oil demand for the first quarter of 2020, while maintaining its full year growth prediction stable. Omicron coronavirus variants will only have mild effects as the world adjusts to the pandemic.

“Some recovery that was previously anticipated in the fourth-quarter of 2021 have been shifted to 2022’s first quarter, with a gradual recovery through the second quarter of 2022,” OPEC stated in its report.

“Moreover the Omicron version’s impact is expected to be short-lived as the world gets better prepared to deal with Covid-19 and related problems.”

Also in focus this week will be the ’s two-day policy-setting meeting, concluding on Wednesday. It is expected that the U.S. central banking will acknowledge rising inflation by increasing the pace of the withdrawal from its bond-buying programme.

The result could be a more rigid dollar that can affect crude prices. It will also make oil more costly for those who have other currencies.