While climbing Omicron cases have sparked fear of demand destruction, supply issues in Libya and falling U.S. oil inventories pushed prices higher.
The rapidly multiplying count of Omicron cases around the world has sparked fears in the oil market of another period of weak demand, with the new strain already becoming the dominant COVID variant in the United States. Despite early indications of Omicron being less lethal, the market will still have to wait out this period of bearish news before it can regain its bullish sentiment. Acting as temporary support for oil prices, skirmishes in Libya that led to a force majeure on oil exports have provided some upward pressure on prices, as did news of US crude oil inventories apparently falling for the fourth week in a row. These bullish factors helped push oil prices higher on Tuesday morning.
Oilprice.com