Oil drops for 2nd session amid concerns over rising COVID-19 cases

SINGAPORE: Oil lost more ground on Monday as rapid rise in cases of Omicron COVID-19 variant hit economic activity, although losses were limited by supply disruptions in Kazakhstan and Libya .

Brent crude slipped 38 cents, or 0.46%, to US $ 81.37 a barrel, while US West Texas Intermediate (WTI) crude fell 34 cents, or 0.43%, to 78. US $ 56 per barrel.

U.S. employment in the country grew less than expected in December amid a labor shortage, and job gains could remain moderate in the near term as COVID-infections spiral. 19 disrupts economic activity.

More than 304.87 million people are believed to have been infected with the novel coronavirus worldwide and 5,834,506 have died, according to a Reuters tally.

U.S. energy companies have kicked off the new year by continuing to add oil and gas platforms after increasing the number of platforms in 2021 after two years of decline.

The number of oil and gas rigs, an early indicator of future production, increased by two to 588 in the week of Jan. 7, its highest level since April 2020, energy services firm Baker said on Friday. Hughes Co BKR.N in its closely watched report.

However, supply disruptions in other parts of the world are likely to support prices.

In Kazakhstan’s main city, Almaty, security forces appeared to control the streets and the president said constitutional order was largely restored, a day after Russia sent troops to help quell an uprising .

Protests began in the oil-rich western regions of Kazakhstan after the state’s price caps for butane and propane were lifted on New Year’s Day.

Production at Kazakhstan’s main oilfield, Tengiz, was curtailed on Thursday, its operator Chevron Corp said, as some contractors disrupted train lines in support of protests in the central Asian country.

Production in Libya fell to 729,000 barrels per day from 1.3 million barrels per day last year, in part due to pipeline maintenance work.

The additions of offers from the Organization of the Petroleum Exporting Countries, Russia and their allies – collectively referred to as OPEC + – are not keeping up with the growth in demand.

OPEC production in December increased by 70,000 bpd from the previous month, compared to the 253,000 bpd increase allowed under the OPEC + supply agreement which restored production in 2020 when demand collapsed under COVID-19 lockdowns.

(Reporting by Naveen Thukral; Editing by Michael Perry)


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