Business

Oil prices down after US flight disruptions due to COVID-19

Several airlines cancel flights as omicron spreads among employees

Oil prices decreased on Monday as ongoing omicron variant has forced many airlines to halt their flights in the US, disrupting travel during the busy holiday weekend.

International benchmark Brent crude was trading at $75.66 per barrel at 1255 GMT for a 0.17% decrease after closing the previous session at $75.79 a barrel.

American benchmark West Texas Intermediate (WTI) was at $72.75 per barrel at the same time for a 1.40% loss after trade ended at $73.79 a barrel in the previous session.

Despite a relatively better trading last week with both benchmarks posting around 4% increase as omicron variant of COVID-19 appears to be a milder disease, concerns over its contagion remained.

Airlines in the US canceled nearly 1,000 flights on Sunday as the omicron variant of COVID-19 spread rapidly, increasing the number of sick calls from pilots.

Around 1,500 flights have been cancelled in the country since Friday, causing travel disruptions over the major holiday weekend. The spread of omicron among employees caused the cancellations, according to United Airlines, Delta Air Lines, American Airlines, and JetBlue Airways.

Investors are now keeping tabs on the next Organization of Petroleum Exporting Countries (OPEC) and its allies’, known as OPEC+, meeting on Jan. 4.

The OPEC+ producers will determine whether to increase output by 400,000 barrels per day (bpd) in February.

According to Russia’s Deputy Prime Minister Alexander Novak, oil prices are unlikely to alter dramatically next year, with demand recovering to pre-pandemic levels only by the end of 2022.

Source
AA

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