Oil Mixed as Omicron Concerns Ease but Supply Concerns Remain By

© Reuters.

By Gina Lee

– Oil was mixed Friday morning in Asia as concerns that the omicron COVID-19 variant could hit oil demand eased, but supply still remains tight.

Brent oil futures inched down 0.10% to $76.52 by 9:47 PM ET (2:47 AM GMT) and WTI futures jumped 1.32% to $73.72.

Good news from COVID-19 front gave the black liquid a boost, with trading volumes thin before the holidays.

A U.K. health agency said on Thursday that omicron was less likely to cause hospitalization than the Delta variant. The U.S. Food and Drug Administration also grant emergency use approval for  Merck & Co . Inc.'s (NYSE:MRK) COVID-19 pill on Thursday after Pfizer Inc.'s (NYSE:PFE) COVID-19 antiviral therapy, Paxlovid, received emergency use authorization from the regulator the day before.

“Crude prices stabilized after a rash of mostly positive COVID-19 vaccine/treatment headlines in the fight against omicron,” OANDA Corp. senior market analyst Edward Moya told Bloomberg.

“It seems all the major catalysts that await oil in the New Year lean towards higher prices,” he added.

However, "investors remained cautious amid surging infection cases," Nissan Securities general manager of research Hiroyuki Kikukawa told Reuters.

United Airlines and Delta Air Lines (NYSE:DAL) said on Thursday they had each canceled dozens of Christmas Eve flights as the spread of omicron meant a smaller workforce.

"Still, given the soaring natural gas prices in Europe and Asia, oil will likely keep a positive tone on expectations that some industries would switch fuel from high priced gas to oil," said Kikukawa.

Meanwhile, Exxon Mobil (NYSE:XOM) has extinguished a fire at its Baytown oil-processing facility, one of the largest in the U.S. Exxon spokeswoman Julie King said the company is adjusting operating rates to focus on stabilizing the affected unit, and gasoline’s premium over crude hit around 6.1% after the news.

“Today we had some bullish factors to drive up market sentiment,” Commodity Research Group senior partner Andrew Lebow told Bloomberg.

“The Baytown refinery fire could potentially tighten gasoline supplies in the U.S. and it’s happening while crude stocks are being drawn down domestically,” he added.

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