Crude oil market suffers from bearish sentiments caused by the new Omicron

The crude oil market continues to suffer from bearish sentiments caused by the new Omicron COVID-19 variant, which has pushed crude oil prices below $70 per barrel.

Also, the International Air Transport Association (IATA) Thursday warned that the response of nations to the Omicron COVID-19 variant poses a threat to air transport recovery. 

Crude oil benchmark, Brent closed at $68.88 per barrel while West Texas Intermediate (WTI), also closed with a 0.92% decline at $65.57 per barrel, while Nigeria’s crude, Bonny Light closed at $69.81 per barrel, representing a 5.05% decline. With the new strain of the virus that has proven to be vaccine resistant, crude prices saw a significant downturn in the previous week.

“With uncertainty over Omicron, we expect that OPEC will shelve its target to increase output in January and keep its quota flat,” Morgan Stanley, an American multinational investment bank and financial services company wrote in a note to clients.

Daily Trust reports that there are fears that obstructions in the oil market would harm Nigeria’s economy, which receives huge revenue from oil export.

Nigeria has so far recorded three cases of Omicron and the Nigeria Centre for Disease Control (NCDC) said they were found after collection of samples for the stipulated day two test for all travellers to Nigeria.

“These cases were recent arrivals in the country in the past week. Follow up to ensure isolation, linkage to clinical care, contact tracing and other relevant response activities have commenced. 

“Arrangements are also being made to notify the country where travel originated according to the provisions of the International Health Regulations,” the NCDC said.

Before the advent of the COVID-19, Nigeria’s oil sector generally accounted for about nine per cent of the country’s gross domestic product (GDP). Between October and December 2020, the oil industry contributed 5.9 per cent to the total real GDP.