Omicron puts pressure on oil prices

Oil prices fell more than 3% on Tuesday, following financial markets after comments from drug maker Moderna raised doubts about the effectiveness of coronavirus vaccines against the new variant, Investing.com reports.

Moderna chief Stéphane Bancel said COVID-19 vaccines are unlikely to be as effective against the Omicron variant as against Delta.

Brent futures fell by 3.44% to $70.91, West Texas Intermediate (WTI) – by 3.02% to $67.84.

On Friday, oil prices fell about 12%, along with other markets amid fears that the emergence of a new strain of coronavirus will lead to new lockdowns and hit the growth of the global economy, as well as weaken the oil demand.

The new variant of the coronavirus, dubbed Omicron, is likely to spread worldwide, posing "very high" global risks, the World Health Organization (WHO) said Monday.

Due to the vague outlook for demand, expectations are growing that OPEC+ will abandon the planned increase in oil production by 400 thousand barrels per day in January.

“We believe that the group will tend to suspend production growth due to the emergence of the omicron strain and the release of reserves by major oil consumers,” said Vivek Dara, commodity analyst at Commonwealth Bank.

To recap, the new Covid variant affected the schedule of OPEC+ meetings.