Oil prices slipped on Thursday, trimming big gains from the previous two sessions, amid uncertainty over near-term demand as cases of the highly contagious Omicron variant of the coronavirus surge around the globe.
Brent crude futures shed 44 cents to $84 a barrel, after rising 1.3% while U.S. West Texas Intermediate crude futures slipped 43 cents to $82 a barrel after climbing 1.7% in the previous session.
Data from the U.S. Energy Information Administration on Wednesday showed fuel demand has taken a hit from Omicron, with gasoline stockpiles increasing by 8 million barrels.
Gasoline demand was weaker-than-expected and still below pre-pandemic levels, and if this becomes a trend, oil won’t be able to continue to push higher,” OANDA analyst Edward Moya said
The market had earlier latched on to a bigger drawdown than expected in crude inventories and the fact that stockpiles are at their lowest since October 2018, pushing Brent and WTI to touch their highest in two months on Wednesday.
However, U.S. supplies are set to rise as producers are paving the way for faster production by expanding well completions in the country’s top shale oil field, the Permian Basin of west Texas and New Mexico.