DUBAI: Oil prices rebounded on Monday after a huge slump last week, which was lead by fears brought by the new COVID-19 variant, Omicron.
Brent crude futures climbed $3.11, or 4.3 percent, to $75.83 a barrel by 0355 GMT, after falling $9.50 on Friday.
U.S. West Texas Intermediate (WTI) crude was up $3.47, or 5.1 percent, at $71.62 a barrel, having tumbled $10.24 in the previous session.
Oil prices plunged more than 10 percent on Friday, their biggest one-day drop since April 2020, as the new variant spooked investors across financial markets.
There are worries the new variant could derail the global economic recovery, potentially hurting oil demand, while it has also added to concerns that a supply surplus could swell in the first quarter.
Meanwhile, Russian Deputy Prime Minister Alexander Novak saidon Monday, there is “no need for emergency measures in the oil market.”
He added that OPEC and its allies (OPEC+) partners did not call to review the current deal.
Most Gulf stock markets ended lower on Sunday, with the Saudi and Dubai indexes suffering their biggest single-day fall in nearly two years as fears of a potentially vaccine-resistant coronavirus variant spooked investors.
The World Health Organization on Friday designated the omicron coronavirus variant detected in South Africa as being “of concern” — the fifth variant to be given that designation
Saudi Arabia’s benchmark index slid 4.5 percent, dragged down by a 5.4 percent fall for Al Rajhi Bank and a 6.2 percent decline for Saudi Basic Industries.
The Kingdom halted flights from and to Malawi, Zambia, Madagascar, Angola, Seychelles, Mauritius and the Comoros Islands on Sunday owing to concerns related to the spread of the new COVID-19 strain, state news agency SPA reported on Twitter.
The latest pandemic developments also sent oil prices, a key catalyst for the Gulf’s financial markets, plunging by $10 a barrel on Friday for their largest one-day drop since April 2020. The new variant added to concerns that an oil supply surplus could swell in the first quarter.
“It’s obvious that traders are concerned about the implications of the newly mutated virus which brings back the lock-down memories from last year. If Saudi decides to impose more restrictive measures the economy will be impacted significantly and the growth prospects next year will vanish”, Mohammed Al-Suwayed, chief executive officer of Razeen Capital, said. He said the time is now suitable for investors to reinvest in the market since the share prices are relatively low.
The Technical Advisory Group on SARS-CoV-2 Virus Evolution met today to review what is known about the #COVID19 variant B.1.1.529.— World Health Organization (WHO) (@WHO) November 26, 2021
They advised WHO that it should be designated a Variant of Concern.
WHO has named it Omicron, in line with naming protocols https://t.co/bSbVas9yds pic.twitter.com/Gev1zIt1Ek
Dubai’s main share index declined 5.2 percent, its biggest intraday fall since March 2020, with most stocks in negative territory.
Blue-chip developer Emaar Properties plunged 9.4 percent and budget carrier Air Arabia retreated by 7.1 percent.
In Abu Dhabi, the index fell 1.8 percent, weighed down by a 3.3 percent drop for telecoms company Etisalat and a 1.4 percent decline for First Abu Dhabi Bank, the country’s largest lender.
#NCEMA and the General Civil Aviation Authority: Entry suspension for travellers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana, Mozambique effective November 29.https://t.co/iOSLgyjp2p#TogetherWeRecover pic.twitter.com/ZFumTANelx— NCEMA UAE (@NCEMAUAE) November 26, 2021
The UAE has suspended entry for travelers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana and Mozambique from Nov. 29 over concerns about the new coronavirus variant, the state news agency reported on Friday.
In Qatar, the index slipped by 2.8 percent as investors shunned stocks across board, with petrochemicals group Industries Qatar leading the losses.
Egypt’s blue-chip index lost 1.3 percent, with top lender Commercial International Bank retreating by 0.8 percent.