Oil falls on profit-taking, but remains above $70

Oil fell on Friday, with traders selling crude to book profits after a strong rally this week thanks to growing confidence that the rapid spread of the Omicron strain of the coronavirus will not damage global growth and fuel demand.
The two benchmarks, Brent and West Texas Intermediate, are heading for a rise of more than six percent this week, even with profit taking, in their first weekly increase in seven weeks.
And US crude futures fell 7 cents, or 0.1 percent, to $ 70.87 a barrel by 01:50 GMT, after falling by two percent in a volatile session the previous day.
Brent futures were down 4 cents at $74.38 a barrel, after falling 1.9 percent on Thursday.
Earlier in the week, the oil market regained about half of the losses incurred since the Omicron outbreak on November 25. But the sell-off came last night on the heels of credit rating agency Fitch downgrading two Chinese property developers, Evergrande and Caisa, saying they had defaulted on overseas bonds.
This has fueled fears of a possible slowdown in China’s real estate sector as well as in the broader economy of the world’s largest oil importer.
In addition, there has been some selling after a Japanese study that made headlines showing that the transmissibility of the Omicron strain is more than four times that of the Delta strain, said Jeffrey Halley, an analyst at Oanda.
The rise of the dollar, ahead of US inflation data to be released later on Friday, also pressured oil prices. Oil usually falls when the dollar rises, which makes crude more expensive for holders of other currencies.
(Reuters)