Oil prices gave up gains on Tuesday, falling more than 2% along with broader financial markets, after a media report cast doubt on the efficacy of COVID-19 vaccines against the Omicron coronavirus variant.
Both benchmarks tumbled more than $1 on the news. Brent crude futures fell $1.82, or 2.5%, to $71.62 a barrel at 0605 GMT. U.S. West Texas Intermediate (WTI) crude futures dropped $1.61, or 2.3%, to $68.34 a barrel.
Oil plunged around 12% on Friday along with other markets on fears the heavily mutated Omicron would spark fresh lockdowns and dent global growth, hurting oil demand, Reuters reported.
The World Health Organization said on Monday Omicron posed a very high risk of infection surges, and several countries stepped up travel curbs. It is still unclear how severe the new variant is and whether it can resist existing vaccines.
With the demand outlook under a cloud, expectations are growing that the Organization of the Petroleum Exporting countries, Russia and their allies, together called OPEC+, will put on hold plans to add 400,000 barrels per day (bpd) of supply in January.
Pressure was already growing within OPEC+, due to meet on Dec. 2, to reconsider its supply plan after last week's release of emergency crude reserves by the United States and other major oil-consuming nations to address soaring prices.
