London
Oil rebounded by almost 5% on Monday to $76 a barrel as some investors viewed Friday’s slump in oil and financial markets on concern about the Omicron coronavirus variant as overdone. The World Health Organisation has said it could take weeks to understand the variant’s severity, although a South African doctor who has treated cases said symptoms so far seemed to be mild.
Brent crude was $3.24, or 4.5%, higher at $75.96 by 1047 GMT, after sliding $9.50 on Friday. U.S. West Texas Intermediate (WTI) crude was up $3.12, or 4.6%, at $71.27, having tumbled $10.24 in the previous session. “We saw some correction as Friday’s plunge in oil prices has been overdone,” said Tatsufumi Okoshi, senior economist at Nomura Securities.
Friday’s slide, the biggest one-day drop since April 2020, reflected fears that travel bans would hammer fuel demand. The plunge was exacerbated by low liquidity due to a U.S. holiday, as demand fears did not justify such a fall, analysts said.
“The fear factor had its grip on financial markets on Friday,” said Norbert Ruecker of Swiss bank Julius Baer. “Fundamentally, the announced and enacted international air travel constraints cannot explain such a sharp slump.”
