EIA gasoline inventories increased by 4 million barrels, the first case of omicron was detected in the United States, and oil prices fell 6% from daily highs

Oil futures fell $0.
36, or 0.
5%, on Wednesday (Dec.
1), and settled at $68.
87 per barrel
.
Oil prices fell below
flat as news of the first case of the omicron variant in the United States shook markets ahead of OPEC's meeting to discuss production arrangements.

The first U.
S.
case of omicron was detected in California, while the number of coronavirus cases in South Africa doubled
from Tuesday.
Ed Moya, senior market analyst at Oanda Corp, said Omicron was inevitable to enter the U.
S.
, with energy traders increasingly worried about the short-term outlook
given the speed at which it spread in South Africa.
If omicron were more transmissible, we could see much of the country go into restricted mode
.

John Kilduff, a partner at Again Capital LLC in New York, said, "When the market is hit by news about variants, you sell first and then ask questions
.
Only a break above $70 a barrel in U.
S.
crude is expected to resume further bullish momentum
.
"

OPEC+ began a two-day policy meeting where delegates will debate
planned arrangements for increasing production.
There are growing predictions that the threat of new virus variants will cause OPEC+ to pause production
increases.
Angolan Minister of Mineral Resources and Oil, Diamantino Azevedo, said at the start of the meeting on Wednesday: "A variant has suddenly emerged that could be more dangerous, and new lockdowns may follow
.
" In these uncertain times, OPEC+ must remain cautious and be ready to act
proactively when market conditions warrant it.
”

Francisco Blanch, head of commodities at Bank of America, said in a speech on Wednesday that it maintains its oil price forecast of $85 a barrel next year and could also exceed $
100 if air travel rebounds.
The omicron variant of the coronavirus may have thrown the recovery slightly off track, but we don't know how the outbreak will play out
.
The U.
S.
does not plan to reinstate previous precautions to stop the spread of the variant, and treatments will be available
within two months.
Global oil demand will reach 100.
5 million b/d
next year.
However, in addition to omicron, oil prices still face other potential risks, including more releases from the Strategic Petroleum Reserve and the easing
of sanctions on Iran.

The United States announced plans in November to put 50 million barrels of oil reserves on the market in an attempt to cool energy prices
.
U.
S.
Deputy Secretary of Energy David Turk said that if global energy prices fall sharply, President Biden's administration may adjust the timing of the
plan to release strategic crude oil reserves.

Crude oil inventories fell by 909,000 barrels, refined oil inventories surged 2.
16 million barrels and gasoline inventories surged 4.
029 million barrels in the week ended November 26, ending a seven-week downward streak
in the week ended November 26, EIA data released earlier.
U.
S.
domestic crude oil production rose by 100,000 b/d to 11.
6 million b/d last week, the highest
since the week of May 8, 2020.
Oil prices were nearly $1 lower after the data was released
.