Sonali Paul

MELBOURNE, (Reuters) – Oil prices fell on Thursday amid uncertainties over the near-term demand due to the escalating spread of Omicron, a highly contagious variant of coronavirus, around the world.

U.S. West Texas Intermediate oil futures dropped 7 cents (or 0.1%) to $82.57/barrel at 0221 GMT. They had gained 1.7% during the previous session.

After rising 1.3% on Wednesday, futures lost 6 cents (or 0.1%) to $84.61/barrel

The U.S. Energy Information Administration released data on Wednesday showing that gasoline demand was down from Omicron. In fact, gasoline inventories increased by 8 million barrels over the week ended Jan. 7, as opposed to analyst estimates of a rise of 2.4million barrels.[EIA/S]

OANDA analyst Edward Moya stated in a note that “Gasoline Demand was weaker than expected and still below prepandemic levels.”

Moya stated that Omicron’s impact will be temporary.

The market was anticipating a larger drawdown in crude inventories than anticipated and stockpiles at their lowest level since October 2018, but it had already reacted to this.

Citi stated in a note that “In truth, the weekly EIA Report was less bullish then the headline figure, as total crude oil inventories dropped 4.8million barrels, but were more than compensated by a stock increase across refined products.”

ANZ Research reported that commercial flight numbers were 16% lower than 2019 levels in the week ending Jan. 11. According to FlightRadar 24, this was better than what happened in December’s final week. Numbers were down 20% from pre-pandemic levels.