Oil prices showed signs of recovery on Monday after massive drops last week of over ten per cent on both major benchmarks.
WTI Crude enjoyed a 4.56 per cent rise to $71.26 per barrel, while Brent Crude has also increased by 3.60 per cent to $75.34.
This follows significant falls in prices last Thursday, after the discovery of the Omicron variant, and fears of reduced consumption demand from air travel restrictions and the return of pandemic restrictions across European economies.
The partial recovery comes as the world awaits more data on the new variant and future Covid-19 clampdowns this winter.
Paul Jackson, global head of asset allocation research, at Invesco told City A.M. that the performance of oil markets this winter depends on how different the new variant is to previous incarnations of Covid-19.
He said: “If it turns out that Omicron is no worse than Delta, then I would expect markets to return to a more bullish tone.”
The UK has re-imposed mask mandates in shops and trains, but Home Secretary Savid Javid has told people to prepare for Christmas as normal.
By contrast, Austria is set to introduce compulsory vaccinations, Czech Republic has entered a 30-day state of emergency, while the Netherlands has closed all non-essential shops
Separate to the UK, Scotland’s first minister Nicola Sturgeon is urging people to work from home after six Omicron cases were uncovered in the country.
Since the discovery of the new variant, Downing Street has added South Africa, Botswana, Lesotho, Eswatini, Zimbabwe and Namibia to its red list – preventing international visitors from entering the UK.
Other countries which have imposed new travel restrictions include US, Israel, Japan, Australia and the wider E.U.
Despite the alarm, the World Health Organisation has called for travel restrictions to end, while the National Institutes of Health in the US said there is no evidence the new variant is more deadly than other incarnations of Covid-19.
Leading officials from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have echoed this perspective.
According to Reuters, the Saudi energy minister was quoted saying he was not worried about the Omicron variant.