By Barani Krishnan

Investing.com –  Crude prices were lower by New York’s lunch-hour Monday after swinging on reports of U.K.’s first death from the Omicron variant of Covid and Saudi Energy Minister Abdulaziz bin Salman’s bid to instill confidence in demand for oil.

Boris Johnson, British Prime Minister of Britain announced Monday that the Omicron coronavirus has claimed at least one death in the United Kingdom. 

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.

According to the World Health Organization on Monday Omicron was a “very serious” threat worldwide. Although there is limited evidence of its severeness, it has been confirmed by some sources.

Crude prices, which rallied more than 2% earlier on Monday, extending last week’s gain of around 8%, slumped on news about the first U.K. fatality from the variant and the WHO’s caution.

However, they have now recovered from their lowests in long-term oil demand forecasts by the Saudi energy minister.

Abdulaziz stated that oil will be responsible for 28% in energy consumption until 2045. This is up from 30% in 2020.

He said that a reduction in drilling and exploration investments could reduce oil production by up to 30 million barrels per year by 2030.

After oscillating between sessions highs of $73 or lows of $70.56, -, the U.S. benchmark crude oil index, was at $71.19/barrel by 1:30 PM ET (23:30 GMT). WTI gained 8.1% this week. It had previously fallen to $62.48 in four months due to Omicron-related concerns. This was after an $85.41 high in mid-October that was seven years ago.

The London-traded benchmark oil price was at $74.53 and fell 0.8% to $76.38. It had previously reached a record high of $76.38 but fallen below $74.21. Brent gained 7.7% last week. It had fallen to $65.80 in the previous four months, after hitting an all-time high of $86.70 at mid-October 2014.

“Ultimately, the price will only hold up as long as investors continue to believe Omicron poses no substantial threat,” said Craig Orlam, analyst at online trading platform OANDA. 

“Leaders appear more concerned than investors at the moment which is always a worry,” said Orlam. “With oil prices 15% off their October highs, there does appear to be some caution priced in at these levels.”