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Oil slips in U.S. as COVID-19 surge halts flights

27 December 2021 14:43 (UTC +04:00)

U.S. oil fell on Monday after airlines called off thousands of flights over the Christmas holidays amid surging COVID-19 cases, though Brent crude gained support from hopes that the Omicron variant will have limited impact on global demand, APA reports citing Reuters.

More than 1,300 flights were cancelled by U.S. airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops.

U.S. West Texas Intermediate (WTI) crude was down 89 cents, or 1.2%, at $72.90 a barrel by 0948 GMT. The U.S. market was closed on Friday for a holiday. Global benchmark Brent crude rose 12 cents, or 0.2%, to $76.26.

"Lower travel equalling lower economic activity in the U.S. equals lower WTI," said Jeffrey Halley, analyst at brokerage OANDA, who added that the divergence between Brent and WTI could reflect that recovery remains on course.

"The disruption to goods and services from isolating workers, notably air travel, seems to be the main fallout so far," he said of rising Omicron cases. "That is only likely to cause short-term nerves, with the global recovery story for 2022 still on track."