By Barani Krishnan

Investing.com – Oil was headed for a 4% gain on the week in late Thursday trading, rebounded after last week’s slump, as energy markets were caught in a wave of year-end volatility worsened by Covid’s Omicron variant.

By 2:08 pm ET (19:08 GMT), the U.S. benchmark crude oil price was at $73.58 per barrel. This was an increase of 82 cents (or 1.1%). WTI would see a 3.9% increase for the week. This compares to a 1.1% decrease last week and an 8.2% gain in the previous week.

The London-traded Brent, which is the international benchmark for oil, rose $1.07 or 1.4% to $76.35 per barrel. Brent posted a 3.9% gain for the week. It was following the same volatility pattern as WTI in past weeks.

Thursday will be the last trading day of this week, with U.S. markets closed on Friday in observation of Saturday’s Christmas holiday.

“It’s a tug-of-war till the end between the bulls and bears, and the bulls are winning now as the fears over the Omicron are waning,” said John Kildufff, founding partner at New York-based energy hedge fund Again Capital.

Petroleum prices fell by 6% on Friday and Monday, as the markets responded to the Omicron being the predominant strain of coronavirus worldwide. 

Numerous restrictions were introduced to combat the Covid variant in major U.S. cities like Chicago, Los Angeles, and New York. President Joe Biden had also warned that Americans who do not get vaccinated for the virus faced “a winter of severe illness and death”.

Those cautions aside, a general spike in Covid infections, hospitalizations — and, in some countries, even deaths —  had triggered broad risk aversion.

The bearish mood has subsided in the last 48 hours, proving that the Omicron is a more lethal Covid form despite its rapid-spreading abilities. 

The US Food and Drug Administration’s on Thursday for Pfizer’s Paxlovid pill — the world’s first for Covid — also boosted risk appetite.