Oil was down as much as 6% on Monday due to omicron fears with the West Texas Intermediate crude trading at $66.44 down $4.42 day-over-day.
The decline comes as governments have taken increasingly strict measures to impede the spread of the Omicron virus with new measures including the closing of bars, restaurants and non-essential shops in the Netherlands and travel restrictions from the UK to Germany.
Oil prices have been seeing mixed signals recently with the EIA saying that Omicron would be a bump in the road to pre-omicron supply and demand equilibrium, while Goldman Sachs analysts saw oil prices possibly rising to $100 per barrel in 2022 and 2023 on supply shortages.
“You see how we will average a new record high in demand in 2022, and again, in 2023,” said Goldman Sachs head of energy research, Damien Courvalin, as recently as mid-December.
Meanwhile in South Africa the number of COVID-related deaths has remained relatively stable since mid-November when the new variant was discovered fluctuating between 5 and 35 per day, while the number of infections has risen from around 100 to over 20,000 in the same period.