Omicron so far does not look deadly, but there are still lingering concerns about potential oil demand destruction from it, says Phil Flynn of the PRICE Futures Group.

The UK prime minister Boris Johnson made warnings about a "tidal wave" of this new variant and one death, but the oil market is trying to look beyond it. Bloomberg reported that Iraq's oil minister said on Sunday that he doesn't see any impact yet from the latest outbreak. OPEC, in its latest report, raised its oil demand figure by 200,000 BPD to 28.8 million barrels a day. That should provide a supportive backdrop. They also said in their oil market report that, "As vaccination rates increase, the impact of the Omicron variant is projected to be mild and short-lived."

The crude oil market is also shaking off Chinese economic concerns on the Evergrande Group that slipped and defaulted on some debt last Thursday. The Biden administration looks to put more restrictions on US energy consumption while China goes the other way. Reuters reports that China will loosen blanket restrictions on energy consumption to ensure environmental and climate targets do not erode future economic growth, according to a policy document issued after an agenda-setting meeting of the country's top leaders.

Bloomberg reported that iron ore surged more than 7% in Singapore amid demand optimism on expectations that China will move to increase stimulus next year to bolster the economy. Prices also jumped in Dalian.

The Iran talks are not going well on any front. Reuters reports that, "Saudi Arabia's envoy to the United Nations said the kingdom wanted more substantive talks with Iran, but that Tehran was so far biding its time and 'playing games' in the discussions." Saudi Arabia and Iran, the region's Sunni Muslim and Shi'ite powerhouses, launched direct talks this year at a time global powers are trying to salvage a nuclear pact with Tehran and as efforts led by the UN to end the Yemen war stall.

Oil should be bought on pullbacks as demand should continue to surprise on the upside.

Natural gas is bouncing back over $400 as Bam WX is predicting a polar vortex just in time for Christmas. We should see a withdrawal of 83 bcf this week. Europe's weather is turning cold and so is its natural gas politics. Reports are saying that based on current conditions, approval of the Russian Nord Stream 2 pipeline is impossible. Russia is saying they will do what it takes to please regulators. Maybe pull your troops back off the border of Ukraine. Add to that, Belarus President Lukashenko is warning that he could cut off supply if the EU puts on more sanctions.

Learn more about Phil Flynn by visiting Price Futures Group.