Covid-19: Oil prices recover but investors cautious due to new Omicron variant

Oil prices recovered some losses with WTI crude gaining over five per cent on Monday morning as investors were a bit cautious and focused on new coronavirus variant Omicron’s spread.

The spread of a new Covid-19 variant from South Africa, Omicron, resulted in sharp risk-off sentiment and sell-offs in global markets across the board on Friday. Brent fell 11.5 per cent on Friday, closing at $72.2 per barrel, the largest single-day drop since April 2020.

Brent rebounded 4.3 per cent to $75.85 a barrel, while US crude rose 5.15 per cent to $71.6 per barrel on Monday morning at 8.25 am UAE time.

• Omicron Covid-19 variant: Markets jittery as new strain threatens economic recovery

“The developments highlight that we are still very much in the midst of the Covid pandemic. Omicron has been labelled as highly transmissible and a ‘variant of concern’ by the WHO. There are fears that the mutation might be more contagious than previous versions and that existing vaccines might be less efficient against it,” said Monica Malik, chief economist Abu Dhabi Commercial Bank.

waheedabbas@khaleejtimes.com