By Barani Krishnan

Investing.com – The newest known variant of Covid isn’t going away, as much as oil bulls wish it would. 

Omicron’s renewed grip on headlines this week is costing fresh losses to longs who just saw relief last week from six straight weeks of losses.

The London-traded, which is the international benchmark for oil, fell $1.79 or 2.4% to $73.23 at 1:45 ET (18:45 GMT) after reaching a session high in $74.97, and a low of $72.65. Brent dropped 2.5% during the week. After losing 18% in six weeks, the global crude benchmark rose 7.5% last week. It had fallen to $65.80 after a seven-year-high of $86.70 mid-October.

After oscillating between sessions highs of $72.25, and lows of $69.94, WTI, the U.S. benchmark oil, fell $2.71 (or 2.4%) to $70.67/barrel. Week-to-date, WTI was down 1.3% after last week’s outsized gain of 8.2%. Prior to that, U.S. crude had been down for six weeks back-to-back, losing 20% in all and falling to as low as $62.48 from this year’s peak of $85.41.

“We could see further consolidation around $70 in the coming sessions as we learn more about Omicron, what restrictions it will bring, and whether OPEC+ will react,” Craig Erlam, analyst at online trading platform OANDA.

OPEC+ — a 23-nation oil producing alliance led by the 13-member OPEC under Saudi Arabia and 10 others non-OPEC countries steered by Russia — has so far brushed aside talk of about the Omicron variant of the coronavirus becoming as disruptive to energy demand as the original Covid-19 strain that broke out in 2020.

The OPEC, a Saudi-led organization, released its monthly demand outlook earlier this week. It forecast that the world would consume 99.13 millions barrels of crude oil per day in the first quarter 2022. This is an increase of 1.1 million over its November forecast.

Rochelle Walensky, head of the Centers for Disease Control and Prevention, the agency leading America’s battle against Covid, said Omicron was “increasing rapidly” in the United States and was expected “to become the dominant strain in the United States as it has in other countries in the coming weeks”. 

Walensky reported that Covid’s seven-day U.S. hospital admittances increased by 4% over the previous week. Meanwhile, Covid’s seven-day daily death average was up more than 8% over the preceding week.

But Walensky and other other global health officials have also repeatedly said the severity of Omicron as a Covid variant — i.e. how gravely it can make people ill or kill them — was not known. They have advised people to be vaccinated to protect themselves against this strain. Omicron is a virus that can cause serious illness in those who are inoculated. Officials claim this because Omicron appears to have spread in individuals who were inoculated.