U.S. oil snaps 7-session streak of gains but logs best yearly rise since 2009

U.S. oil snaps 7-session streak of gains but logs best yearly rise since 2009

U.S. oil futures were headed lower on the eve of 2022, threatening to post a loss for the first time in eight sessions, as investors looked to lighten up on risk after gains for crude in the week, the month and the year.

News on the spread of the omicron variant of COVID is being watched by traders but the novel strain has mostly been dismissed as less severe and therefore less of a potential demand drag for the crude complex.

West Texas Intermediate crude for February delivery
CLG22,
-2.03%

 
CL00,
-2.03%

traded $1.50, or 2%, lower at $75.49 a barrel on the New York Mercantile Exchange, after gaining 0.6% on Thursday. WTI’s seven straight gains mark the longest such advance since an eight-session period ended Feb. 10.

February Brent crude
BRNG22,
the international benchmark
BRN00,
+0.21%
,
was trading $1.42, or 1.8%, lower at $78.10 a barrel on ICE Futures Europe, following a gain of 0.1% a day ago.

For the week, month and year, WTI is up 2.3%, 14% and nearly 55%; the Brent contract is up 3% for the week, almost 13% in December and about 51% in the year to date, FactSet data show.

For the quarter, Brent is down 0.7%, while WTI is up a modest 0.6%.

Friday’s stallout in crude comes as COVID infections have ratcheted higher in parts of the world. The seven-day average of new cases in the U.S. has risen at a parabolic pace to 344,543 on Thursday, up from 301,477 on Wednesday.

And flight cancellations headed into 2022 persist as sick employees make it difficult for airlines to properly staff flights.

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However, in South Africa, where the omicron variant of COVID was first identified, the government said the country’s latest viral outbreak had subsided and it would be easing restrictions.

Next week, OPEC+ will assess its plans to boost daily oil production among its members to 400,000 bpd starting in February or adjust its output to factor the spread of COVID. The Organization of the Petroleum Exporting Countries and its allies, including Russia, will meet on Jan. 4 to discuss global output strategy.

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