By Gina Lee

Investing.com – Oil was down Tuesday morning in Asia, with fuel demand concerns rising after more countries tightened measures to curb the spread of the omicron COVID-19 variant.

At 10:49 ET, the price of $74 had fallen 0.52% (3:49 GMT), and it fell to $70.89 by 0.56%.

On Monday, the cartel raised its global oil demand forecast for 2022’s first quarter. It will also stick to its timeline to return to levels pre-COVID-19. According to the cartel, omicron should have a slight and temporary impact.

Edward Moya from OANDA, senior analyst at OANDA, said that although energy traders do not want to make bets against Organization of the Petroleum Exporting Countries or its allies (OPEC+), all the short term risks of omicron to U.S. Federal Reserve monetary rate tightening are proving very disruptive to the immediate outlook for oil prices.”

“The virus is spreading across Europe and this has caused a greater impact than we expected. When you consider family gatherings during the holidays, it’s possible that the near-term outlook will be lowered over the coming month.”

Boris Johnson, the U.K.’s first victim of omicron-related illness, was reported as its first. Other countries, including Norway, are tightening restrictive measures to curb the variant’s spread. China has reported its first Omicron-related case in Asia Pacific. Zhejiang province is currently fighting COVID-19 clusters.

Asian Development Bank cut Tuesday its growth projections for Asia developing countries for 2021-2022. Omicron’s uncertainty and potential risks could have an impact on fuel demand.

On the supply side, the largest U.S. shale basin’s output is expected to surge to a record in January 2022, according to Monday’s monthly forecast from the U.S. Energy Information Administration. Investors are now awaiting U.S. crude oil supply data from American Petroleum Institute later today.