Oil prices declined amid the low liquidity into the holiday season, but market watchers are looking out for the impact of the Omicron variant moving forward.
- London futures fell by 0.9% to hover around $76 a barrel on Friday. Only some 125,000 contracts were traded, lower than the usual volume of just below 1 million.
- With the thin volumes, prices settled early at 1 p.m. London time.
- Despite Friday’s drop, oil is still on track for an annual gain after a strong rebound following the COVID-19 pandemic, even as the rally has lost steam recently.
- There are also emerging signs of tightening amid the disruptions recorded in Libya and Nigeria. Demand has been driven by the news regarding Omicron.
- Analysts predict that reports that Omicron could be highly transmissible but less dangerous could be bullish for oil next year, driving the risk of spikes in 2022.