By Barani Krishnan

Investing.com – Oil prices jumped more than 4% on the week, rebounding from last week’s slump, as energy markets were caught in a wave of year-end volatility worsened by Covid’s Omicron variant.

, the benchmark for U.S. crude, settled Thursday’s trade up $1.03, or 1.4%, at $73.79 per barrel. That put WTI up 4.1% for the week, versus a 1.1% decline last week and a 8.2% gain the week before that.

London-traded , the global benchmark for oil, settled up $1.56, or 2.1%, at $76.85 a barrel. For the week, Brent showed a gain of 4.5%, just like WTI, and following a pattern of volatility similar to the U.S. crude benchmark in previous weeks.

Thursday is the last trading day of this week, with U.S. markets closed on Friday in observation of Saturday’s Christmas holiday.

“It’s a tug-of-war till the end between the bulls and bears, and the bulls are winning now as the fears over the Omicron are waning,” said John Kildufff, founding partner at New York-based energy hedge fund Again Capital.

Oil prices were down about 6% between Friday and Monday combined as markets reacted to news of the Omicron becoming the dominant strain of the coronavirus in most parts of the world, including the United States. 

Major U.S. cities, including New York, Los Angeles and Chicago, announced mass cutbacks in social activity earlier this week and introduced various new restrictions to deal with the Covid variant. President Joe Biden had also warned that Americans who do not get vaccinated for the virus faced “a winter of severe illness and death”.

Those cautions aside, a general spike in Covid infections, hospitalizations — and, in some countries, even deaths —  had triggered broad risk aversion.

Much of the bearish mood, however, dissipated in the past 48 hours as evidence increasingly the Omicron to be a less lethal form of Covid despite its fast-spreading ability. 

The US Food and Drug Administration’s on Thursday for Pfizer’s Paxlovid pill — the world’s first for Covid — also boosted risk appetite.

(Article published at 2:10pm ET, updated at 3:06pm ET).