Jessica Jaganathan

SINGAPORE, (Reuters) – Oil prices fell by around 2% on Monday morning as rising cases of Omicron coronavirus in Europe and America fueled investor concerns that increased restrictions placed on fuel businesses may lead to an increase in demand.

U.S. West Texas Intermediate oil futures were down 1.9% at $72.16/barrel by 0036 GMT. U.S. West Texas Intermediate Crude futures plummeted 2.1% to $69.35/barrel

Kelvin Wong from CMC Markets, market analyst said that today’s Asia is characterized by a weakening sentiment regarding oil prices.

“(This) is due to the fear of impending restrictions economic activities to control the increasing spread COVID-19 Omicron worldwide, which might increase the risk demand slowdown.”

The Netherlands put themselves in lockdown this Sunday. Other European countries are facing the threat of COVID-19 limitations that could be imposed before Christmas and New Year.

The White House’s medical advisor Dr. Anthony Fauci advised Americans to travel to see loved ones and to have booster shots. He also recommended that people wear masks when they are in public places.

U.S. oil companies added oil and other rigs last week.

Baker Hughes Co reported on Friday that the number of oil and natural gas rigs, which are early indicators of future output, rose three times to 579 for the week ended Dec. 17, their highest point since April 2020.

Despite this, Russia is expected to export less oil. Russia’s first-quarter 2022 exports were 56.05M tonnes, while the fourth quarter 2021 export was 58.3M tonnes. Reuters released a quarterly export schedule on Friday.