After a short-term reprieve yesterday, the Omicron theme has spooked investors again on Tuesday, sending risky assets to fresh lows across the markets. According to preliminary tests, COVID-19 antibody drugs are not as effective against the Omicron variant, which is not suitable for markets, suggesting the global sell-off maybe not be over yet.

Suffering losses for the seventh week in a row already, Brent crude plunged below the $70 for the first time since late August today amid rising concerns over the spread of the new virus that, in turn, could dent oil demand globally. Adding to gloomy sentiment in the markets, Moderna CEO said that current vaccines would struggle with Omicron. Earlier, the CEO noted that the mutations in the new variant were "concerning".

Of note, oil futures keep bleeding despite a weaker US dollar. The greenback lost ground, and US Treasury yields amid money markets push back on the Federal Reserve rate hike expectations. Now, a 25 bps hike is seen in September 2022. Last week, a hike was priced in for July 2022.

Meanwhile, OPEC oil output rose 220,000 barrels per day in November from the previous month, while the alliance had pledged to increase production by 400,000 barrels per day. Angola and Nigeria were among producers unable to reach targets. As a reminder, the OPEC+ meeting is due on Thursday. Ahead of this event, the appearance of Omicron has cast doubt on whether the group will go along with its plan.

Brent would stay on the defensive amid lingering uncertainty surrounding the new coronavirus variant theme in the short term. However, the oil futures could erase some losses by the end of the week depending on the OPEC+ verdict on oil production.