US Airlines Cancel Thousands of Flights, Oil Prices Sluggish

Thousands of flights have been canceled in the US due to staff shortages over the Christmas holidays. This underlies the bearish movement of oil prices earlier this week.

Brearish oil price, brent oil price, wti oil price, us flight schedule, oil price movement, opec meeting

Crude oil prices fell slightly in early trading (27/December) after US airlines canceled thousands of scheduled flights over the Christmas holiday. WTI (West Texas Intermediate) oil price is currently in the range of $73.10 per barrel, down more than 1 percent from the daily Open price. Meanwhile, Brent oil was trading at 75.81 percent.

Over the past three days, US airlines have been forced to cancel flights due to staff shortages. Employees in the airline industry prefer to spend the Christmas holidays in the shadow of the recent surge in Omicron cases. Oil prices were hit hard because flight cancellations resulted in a drop in fuel demand.

Markets Highlight OPEC+ Meeting

However, this condition is thought to be temporary. Analysts believe that oil prices have a chance to rise again in the next few days. This is because OPEC+ will hold another meeting on January 4 to discuss the increase in output by 400 thousand barrels per day (bpd) in February 2022. The OPEC+ meeting this time is in the spotlight because it takes place amid the threat of the Omicron variant that has spread globally.

Russia, which is OPEC's main partner, believes that its production policy will not change significantly. Russia's Deputy Prime Minister, Alexander Novak, said that he expects fuel demand to recover to pre-COVID conditions by the end of 2022, so there is no reason for OPEC to make many changes to its production policy in the near future.

Furthermore, Russia also alluded to the phenomenon of a surge in natural gas prices in Europe this winter. Novak revealed that the European Union can only blame its own policies for the sharp rise in natural gas reaching record highs. According to him, several European Union member countries resell gas at a higher price even though the gas was purchased from Russia at a low price.