Crude oil futures dip on profit-taking after 3-day bull run

Crude oil futures dipped in mid-morning trade in Asia Dec. 24 as investors booked profits after a three-day bull run that pushed oil prices to highs not seen since late November.

At 10 am Singapore time (0200 GMT), the ICE February Brent futures contract was down 25 cents/b (0.33%) from the previous close at $76.60/b.

NYMEX was closed for the Christmas holidays, though the NYMEX February light sweet crude contract had settled at the end of the prior day Dec. 23 up $1.03/b (1.42%) on the day at $73.79/b.

Easing concerns over the omicron variant saw oil prices adding around 7.5% in value over the last three days. Both benchmarks were now hovering at highs not seen since Nov. 26.

A spate of bullish headlines this week indicating positive developments in the fight against COVID-19 was boosting risk sentiment among investors.

Recent studies showed the omicron variant was much less likely to lead to hospitalizations than the delta variant, while the US on Dec. 23 authorized for home use Merck's antiviral pill molnupiravir. This comes just a day after it approved Pfizer's antiviral COVID-19 pill for use.

"Omicron is looking more like a short-term disruption to the economic outlook and not a destructive headwind that knocks the economy off its course," said OANDA senior market analyst Edward Moya.

Further underpinning prices were supply disruptions in Nigeria and Libya that are expected to have knocked out at least 300,000 b/d of supply from oil markets.

Thin liquidity was now expected to keep oil prices rangebound at least until the year-end, analysts said.

"WTI crude will likely consolidate around the low- to mid-$70s/b until OPEC+ gives a hint on what they will do at the January 4th meeting on output, or if a major development happens with Europe's energy crisis," Moya said.

The US oil-directed rig count fell by 11 to 552 in the week ended Dec. 22, data from energy analytics and software company Enverus Dec. 23 showed.