Demand concerns reignited and Libyan production increased, and oil fell for the second day in a row to close near the 81 mark

U.
S.
oil fell 0.
6% late trading on Monday (Jan.
10) to close at $78.
43 a barrel
.
Demand concerns over a rapid increase in global cases of infection with the Omicron variant and the recovery of oil production in Libya and Kazakhstan have added to the downward pressure
on oil prices.

Protests in Kazakhstan last week disrupted rail runs and hit production at Tengiz, the country's largest oil field, while pipeline maintenance in Libya reduced output to 729,000 b/d
from a high of 1.
3 million b/d last year.
Operator Chevron said on Sunday that Kazakhstan's largest oil company, Tengizchevroil (TCO), was gradually increasing output to normal levels
after protests in recent days limited output at the Tengiz field.

Libya's oil minister, Mohamed Oun, said the country's crude oil production had recovered to 900,000 b/d
after maintenance work on a major crude oil pipeline was completed.
The country's oil production has increased
after completing maintenance work on the pipeline connecting the eastern Samah and Dhuhra fields and the largest export terminal, Es Sider.
The pipeline repair work follows a 200,000-b/d
reduction in the country's oil production.

Last month, members of Libya's oil facility guard closed key oil fields in the west, including the Sharara field, demanding payment of salary
arrears.
The ongoing dispute has reduced the country's oil production by about 350,000 barrels
per day.
Libya is sitting on Africa's largest oil reserves, and if the country's output continues to decline, it could offset OPEC+'s efforts
to boost output.

Ed Moya, senior market analyst for Oanda's Americas business, said: "The recovery of supply in Libya and Kazakhstan has increased downward pressure
on oil prices.
The market is uneasy about the pandemic situation in Asia's major consumer country, which may weaken the global short-term demand outlook"
.

Global stock markets fell again, with 10-year Treasury yields hitting a two-year high as investors cut back on risky assets
on bets that the Federal Reserve could raise interest rates as early as March.
Phil Flynn, senior analyst at Price Futures, said oil prices followed the stock market lower because of concerns about the Omicron variant
.

Francisco Blanch, head of global commodities at Bank of America, believes that crude oil prices may reach triple digits in the second quarter, driven by a strong demand recovery and OPEC+ supply flattening
over the next two months.
The market balance is likely to be tight in 2022, as Russia's incremental supply is limited and Saudi Arabia and the United Arab Emirates can only produce more crude
.
Travel demand is heavily pent-up, and once the omicron outbreak subsides and there are no more variations, the recovery could be "spectacular"
.
The Fed may raise interest rates faster to dampen inflation, potentially increasing volatility across the market in 2022
.

(Hourly Chart)