Oil prices sink again as traders use Omicron as an excuse to hit 'sell' | Reuters

Oil prices sink again as traders use Omicron as an excuse to hit 'sell' | Reuters

Crude oil futures settled lower on Wednesday, as an early rally fizzled and selling intensified on worries the Omicron variant of coronavirus could cut oil demand as global supply builds.

Late in the session, oil prices dropped into negative territory after U.S. officials said the Omicron variant - believed more transmissible than previous strains of coronavirus - had been found in the country.

"When the markets gets hit with news about Frankenstein variants, you're selling and asking questions later," said John Kilduff, partner at Again Capital LLC in New York, said he expects more bullish momentum to return whenever WTI crosses above $70 a barrel.

WTI U.S. crude futures settled down 61 cents, or 0.9%, at $65.57 a barrel. During the session, they were up as much as 4%. Global benchmark Brent crude was down 36 cents, or 0.5%, at $68.87 a barrel.

Benchmark oil futures have been under pressure for weeks on factors ranging from the new coronavirus variant and the U.S. decision to release oil barrels from emergency reserves in tandem with other countries.