WTI bears move in below $80.00 as suply risks abate

• WTI holds steady in the Asian session as supply risks start to abate. 
• Investors keeping an eye on Russia risks and Omricon. 

West Texas Intermediate (WTI) crude oil settled lower on Monday as supply disruptions in Libya and Kazakhstan eased. Some supplies were restored in Kazakhstan, while Libyan oil production rose to 900,000b/d after maintenance work.  However, rising Omicron cases didn’t help either. 

At the time of writing, WTI is trading at $78.50 and is flat on the day so far while investors watch closely China’s Omicron spread, as policy could trigger more travel restrictions. 

China is battling to stamp out its first outbreak of the Omicron variant, only weeks before the Chinese new year and the Beijing Winter Olympics, with cases recorded in at least two distant provinces. On Monday, health authorities reported 97 new locally transmitted cases for the preceding 24 hours, across several cities.

At least 30 cases were in Henan province, while at least 31 new cases were reported in Tianjin, including 15 children aged five to 15. Omicron, the latest variant of Covid-19 is tearing through other countries around the world also. Sweden became the latest country to introduce new restrictions to halt the spread of the omicron variant.

Elsewhere, oil could still find support on tighter supplies and supply risk from Russia. There is much focus on security discussions this week between Russia and the West in order to address tension in eastern Ukraine.

Talks took place with the US today (Geneva) and will now move to Brussels for discussions with NATO on Wednesday and subsequently with the OSCE. However, the bar for a 'break-through' is high which is potential support for the price of oil.