Oil prices on both major benchmarks have sustained their gradual recovery over recent weeks on Wednesday afternoon.
Prices remain steady despite reports of key markets potentially introducing more pandemic restrictions ahead of Christmas.
Brent Crude is trading at $75.69 per barrel, a day-on-day rise of 0.25 per cent, while WTI is trading at $72.11 – an increase of 0.06 per cent.
The numbers remain well below the three-year highs of $86 per barrel in late October, but also significantly above the mid-sixties doldrums both benchmarks fell in after the Omicron variant first emerged.
Both benchmarks dropped over 10 per cent in mid-November amid concerns of reduced air travel demand and lower energy consumption levels.
This reality could still materialise, with the UK government is reportedly set to introduce plan B measures, potentially including work-from-home guidance and vaccine passports.
Craig Erlam, senior market analyst at OANDA, told City A.M. that if the UK is considering more restrictions then other countries will be having similar discussions.
This will “weigh on demand for oil and be a drag on prices.”
However, he also noted that OPEC+ is ready to adjust output – even if it currently remains committed to increasing oil to producing 400,000 barrels per day from 2022.
He said: “The reaction today has been minimal after a strong rebound the last couple of days which suggests traders aren’t too concerned at this point, rather they’re relieved that the early data isn’t as bad as initially feared.”
Meanwhile, various geopolitical factors also remain in play such as US President Joe Biden’s pledge to release strategic reserves to flood the market, alongside Tuesday’s talks between the US-Russia concerning tensions in Ukraine.