Brent crude futures snapped a three-day rally on Friday in light holiday trading but the benchmark was still headed for a weekly gain, with the market focusing on next steps by OPEC+ and the impact of the Omicron variant.
Brent crude futures slid 41 cents, or 0.5%, to $76.44 a barrel by 0741 GMT, following a 2.1% gain in the previous session. The benchmark was still on track for a weekly gain of about 4%.
U.S. markets are closed on Friday for the Christmas holiday.
Oil prices have recovered this week as fears over the impact of the highly infectious Omicron variant on the global economy receded, with early data suggesting it causes a milder level of illness.
“It’s a typical holiday market,” said Chiyoki Chen, chief analyst at Sunward Trading.
“With concerns about the fallout from Omicron fading, market focus shifted to the next move by OPEC+ at its January meeting,” he said.
The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, will likely stick to its decision to raise oil production by 400,000 barrels per day (bpd) each month at its next meeting as long as oil prices stay above $70 a barrel, Chen added.
The group is scheduled to meet next on Jan. 4.
Still, some investors remained cautious amid surging infection cases.
Omicron advanced across the world on Thursday, with health experts warning the battle against the COVID-19 variant was far from over despite two drugmakers saying their vaccines protected against it and despite signs it carried a lower risk of hospitalization.
Coronavirus infections have soared wherever the variant has spread, triggering new restrictions in many countries, including Italy and Greece, and record numbers of new cases.
A higher U.S. rig count also added to pressure on the oil market.
Operating U.S. oil and gas rigs rose to their highest levels since April 2020 in the most recent week, according to energy services firm Baker Hughes. Overall counts are now at 586, portending a boost in output in coming months.
“But given the soaring natural gas prices in Europe and Asia, oil will likely keep a positive tone on expectations that some industries would switch fuel from high-priced gas to oil,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Asian liquefied natural gas (LNG) prices jumped this week, despite tepid Asian demand, as upside risk in the European gas market remains a key driver directing price movement.
Global oil demand roared back in 2021 as the world began to recover from the coronavirus pandemic, and overall world consumption potentially could hit a new record in 2022 – despite efforts to bring down fossil fuel consumption to mitigate climate change.