Oil prices steadied above $75.00 U.S. a barrel in choppy trade on Wednesday, taking a breather after strong gains earlier this week, as investors assessed the impact of the Omicron coronavirus variant on the global economy and fuel demand.
Brent crude futures were down 27 cents, or 0.4%, to $75.17 U.S. a barrel, after earlier rising by nearly $1.
U.S. West Texas Intermediate crude was at $71.63 a barrel, down 42 cents or 0.6%, having risen to $72.79 earlier in the session.
After falling by more than 16% since Nov. 25 to around $69 a barrel, Brent crude prices have rebounded by over 9% since Dec. 1 on signs Omicron has had only a limited impact on oil demand.
But reports that British Prime Minister Boris Johnson was set to tighten COVID restrictions, including advice to work from home, revived fears of a slowdown in activity.
The market was also focused on rising geopolitical tensions as talks between Washington and Tehran over Iran’s nuclear programme were set to resume this week with Western officials voicing dismay at sweeping Iranian demands.
An easing of U.S. sanctions is expected to lead to higher exports of Iranian oil, which could add downward pressure on oil prices.
Meanwhile, tensions between Western powers and Russia over Ukraine also remained high after President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose “strong economic and other measures” on Russia if it invades Ukraine, while Putin demanded guarantees that NATO would not expand farther eastward.
Oil markets reacted little to U.S. weekly inventory data.