Oil prices drop as investors wait for Omicron’s impact assessment

Crude oil storage tanks are seen from above at the Cushing Oil Hub in Cushing, Oklahoma on March 24, 2016. REUTERS / Nick Oxford / File Photo

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  • Biden warns Putin of sanctions, Nord Stream 2 disruption if Russia invades
  • API shows crude inventories are falling and fuel inventories are increasing – sources
  • Study suggests Pfizer vaccine may partially protect against Omicron

TOKYO, Dec. 8 (Reuters) – Oil prices fell on Wednesday, taking a break after two days of gains, as investors awaited an assessment of the full impact of the Omicron coronavirus variant on the global economy and the fuel demand as well as vaccine effectiveness.

Brent crude futures fell 19 cents, or 0.3%, to $ 75.25 a barrel at 5:19 a.m. GMT, after settling up 3.2% on Tuesday. US West Texas Intermediate crude was at $ 71.82 a barrel, down 23 cents, or 0.3%, after gaining 3.7% in the previous session.

Oil prices rebounded earlier this week after a collapse last week over growing optimism that the new Omicron variant will not cause major economic damage.

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“The recovery took a break as investors tried to confirm the full impact of the Omicron variant before buying more,” said Satoru Yoshida, commodities analyst at Rakuten Securities.

The Omicron variant may partially escape the protection of two doses of Pfizer (PFE.N) and the COVID-19 vaccine from its partner BioNTech, the research director of a laboratory at the Africa Health Research Institute in Africa said on Tuesday. from South. Read more

British drugmaker GSK (GSK.L), meanwhile, said on Tuesday that its antibody-based COVID-19 therapy with its US partner Vir Biotechnology (VIR.O) was effective against all mutations in the variant. Omicron. Read more

“Investors are still not fully bullish and are taking a wait-and-see approach at this time,” said Hiroyuki Kikukawa, chief research officer at Nissan Securities.

The market is also focused on Iranian nuclear talks, tensions between Russia and Ukraine and winter weather conditions in the northern hemisphere, he added.

Indirect talks between Washington and Tehran on restoring their nuclear pact resumed a week ago but broke down on Friday, with a resumption expected later this week, as Western officials expressed dismay at massive Iranian demands. .

Germany wants Iran to present realistic proposals in talks over its nuclear program, a spokeswoman for the Foreign Ministry said on Monday. Read more

Meanwhile, President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose “strong economic and other measures” on Russia if it invaded Ukraine, while Putin demanded guarantees that NATO would not. would not extend further east. Read more

Biden warned Putin he could face severe economic sanctions, disruption of the Nord Stream 2 pipeline to Europe, and that the United States and its European allies would provide additional defensive capabilities to Ukraine.

Oil markets reacted little to weekly US inventory data.

Inventories of U.S. crude fell last week as inventories of gasoline and distillate rose, according to market sources citing figures from the American Petroleum Institute on Tuesday.

Analysts polled by Reuters expected US crude inventory data to show a second consecutive weekly decline.

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Reporting by Yuka Obayashi; Editing by Lincoln Feast.

Our Standards: Thomson Reuters Trust Principles.

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