The IEA said the market returned to oversupply, and U.S. oil fell more than 1% to hover at the 70 mark

On Tuesday (December 14), crude oil fell $1.
22, or 1.
64%, to close at $73.
17 per barrel
.
Oil prices weighed on oil prices as some countries tightened restrictions to curb the spread of the omicron variant, raising concerns about demand for crude oil, while the IEA said oil production would exceed demand this month and soar sharply next year
.

Italy will require visitors from other EU countries to provide negative Covid test results, and Scotland is urging no more than three
families to gather.
Meanwhile, the World Health Organization (WHO) said the Omicron variant was spreading at an "unprecedented" rate, causing the market to move slightly lower
.

Brent crude saw futures premium for the first time since March as the market digested the short-term impact of omicron on oil demand, and this bearish market structure indicates that the market is well supplied in the near term
.
Spencer Vosko, head of crude oil operations at Black Diamond Commodities LLC, said Omicron had spooked the market and news of new restrictions in the U.
K.
had led to more
sell-offs.

In its monthly oil report, the IEA said it expected the surge in coronavirus cases to only temporarily slow rather than stifle the current recovery
in oil demand.
The impact on the economy of new containment measures to stop the spread of the virus is likely to be more modest
than previous waves of the pandemic.
Oil demand forecasts for this year and next are each cut by 100,000 b/d, mainly due to new travel restrictions expected to hit jet fuel use
.

On the supply side, the U.
S.
will be the country with the largest increase in production for the second month in a row, as drilling activity there is ramping up
.
Next year, Saudi Arabia and Russia could also see record annual production if OPEC+ completely lifts its agreed production restrictions
.
This could result in an average oversupply of 1.
7 million barrels per day in Q1 and Q2 2022, respectively
.

However, the Organization of the Petroleum Exporting Countries (OPEC) has the opposite view
.
OPEC on Monday raised its global oil demand forecast for the first quarter of 2022 and stuck to a timeline for oil demand to return to pre-pandemic levels, saying the Omicron variant of the coronavirus would have only a mild and short-lived impact
.
OPEC said in its monthly report that it expects global oil demand to average 99.
13 million barrels per day in the first quarter of 2022, up 1.
11 million barrels
from last month's forecast.

The dollar held near one-week highs against a basket of major currencies on Tuesday, supported by producer price data
.
Jim Ritterbusch, president of Ritterbusch and Associates LLC, said that with the increasing likelihood of the Fed accelerating tapering of bond purchases, U.
S.
interest rates are likely to rise, pushing the dollar further stronger and pushing down oil prices
.

Crude oil inventories fell by 815,000 barrels, refined oil inventories fell by 1.
016 million barrels, gasoline inventories increased by 426,000 barrels, and Cushing crude inventories increased by 2.
257 million barrels
in the week ended Dec.
10, according to data released by the American Petroleum Institute (API).
After the data was released, the market reaction was muted
.