Oil prices rose on Tuesday, steadying around $75 a barrel and erasing the previous day's declines as investors continued to weigh the impact of renewed restrictions in Europe and Asia amid the spread of the Omicron coronavirus variant.
Brent crude oil futures gained 47 cents, or 0.63%, to $74.26 a barrel by 0910 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose by 48 cents, or 0.67%, to $71.77.
Governments around the world, including most recently Britain and Norway, have tightened restrictions to stop the spread of the Omicron variant.
In China, major manufacturing province Zhejiang is fighting its first COVID-19 cluster this year, with tens of thousands of citizens in quarantine and virus-hit areas suspending business operations, cutting flights and cancelling events.
But it was unclear what impact the restrictions would have on oil prices.
"Oil markets have now grown calmer, and the impact of the Omicron coronavirus variant and potential new lockdowns will likely be the biggest price drivers during the last weeks of 2021," consultancy Eurasia Group said.
The Organization of the Petroleum Exporting Countries on Monday raised its world oil demand forecast for the first quarter of 2022 and stuck to its timeline for a return to pre-pandemic levels of oil use, saying the Omicron coronavirus variant would have a mild and brief impact.
At the same time, the Asian Development Bank on Tuesday trimmed its growth forecasts for developing Asia for this year and next to reflect risks and uncertainty brought on by the variant, which could also hamper oil demand.
On the supply side, OPEC and other major producers including Russia, a group known as OPEC+, plan to gradually increase supply every month by 400,000 barrels per day (bpd) after sharply cutting back output last year.
Output in the largest U.S. shale basin is expected to surge to a record in January, according to a monthly forecast from the U.S. Energy Information Administration on Monday.