Oil prices fell for a third consecutive day on Wednesday on growing signs that supply growth will outpace demand next year, and as the World Health Organization (WHO) said COVID-19 vaccines may be less effective against the Omicron variant.
The market pared the day's losses after U.S. crude inventories fell more than anticipated and implied consumer demand surged to a record in the most recent week in the United States, the world's largest oil consumer.
Brent crude futures were down 29 cents, or 0.4%, at $73.43 a barrel at 12:17 p.m. EST , after losing 69 cents on Tuesday.U.S. West Texas Intermediate crude fell 38 cents, or 0.6%, to $70.34 a barrel after losing 56 cents in the previous session. "The oil market continues to wrestle between a recovery in demand and the fear that the recovery will be negatively impacted by the Omicron virus," said Andrew Lipow, president at Lipow Oil Associates in Houston.
U.S. crude inventories sank by 4.6 million barrels last week and distillate and gasoline stocks also declined, weekly government data showed. Crude exports picked up sharply, while product supplied by refineries, a signal of consumer demand, hit a record 23.2 million barrels per day. "It's the first bullish report in quite some time," said Bob Yawger, director of energy futures at Mizuho.The WHO said preliminary evidence indicated vaccines may be less effective against infection and transmission linked to the Omicron variant, which also carries a higher risk of reinfection.
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