Gas and oil prices jump as Omicron fears ease amid talk of Russia sanctions       

Russian president Vladimir Putin: US intelligence assesses that Russia could be planning a multi-front offensive on Ukraine as early as next year. The Kremlin denies it plans to invade and says the West is gripped by Russophobia. 

Gas and oil prices jumped in Europe on Tuesday as concerns eased over the Omicron variant, while the risks rose of new sanctions on huge energy supplier, Russia. 

Global crude oil price leapt 5% on the day to hit $73.42 a barrel with the Iran nuclear talks hitting roadblocks, influencing traders looking at potential delays of the return of Iranian crude supplies.

The price of natural gas for delivery in January also jumped in Europe, by 6.5% to €95.80 per kilowatt hour, on a Dutch contract traded through the ICE exchange.

The jump in wholesale energy prices points to renewed squeeze for Irish business and household heating, lighting, and power costs this winter. 

Natural gas is particularly important in Ireland and across the rest of Europe in generating power at plants this winter amid the acute shortages of energy even before the onset of winter.                  

Oil prices were pummelled last week over concerns that vaccines might be less effective against the new coronavirus variant Omicron, sparking fears that governments may re-impose restrictions to curb its spread and hit global growth and oil demand.

However, a South African health official reported over the weekend that Omicron cases there had only shown mild symptoms. Also, the top US infectious disease official, Anthony Fauci, has told CNN "it does not look like there's a great degree of severity" so far.

"This lowers the probability of the worst case scenario that the oil markets have been pricing in over the past couple of weeks," ANZ analysts said in a note.

Paradoxically, the brightening economic outlook over the last week does little to lift the prospects for even higher Irish energy bills for business and households this winter, as higher levels of global economic activity stoke demand for global fuels and may add to the recent price hikes.

In another sign of confidence in oil demand, the world's top exporter Saudi Arabia raised monthly crude prices on Sunday. This comes after the Organisation of the Petroleum Exporting Countries and their allies, a group known as Opec+, agreed to continue raising output.

Meanwhile, the West must send a strong message to Russia to deter it from invading Ukraine, including cutting Russia off from the Swift payment system, sanctioning the Nord Stream 2 pipeline and strengthening Nato's eastern flank, Latvia said on Tuesday. 

US intelligence assesses that Russia could be planning a multi-front offensive on Ukraine as early as next year. The Kremlin denies it plans to invade and says the West is gripped by Russophobia. 

US officials have said President Joe Biden will tell President Vladimir Putin that an invasion of its neighbour could see Russia and its banks hit with the toughest economic sanctions yet. 

Nonetheless, stock markets posted gains. "Last week’s sellers have been rudely pushed out of the way in a mad scramble to get back into equities now that Omicron fears are receding almost as fast as they appeared," said Chris Beauchamp, chief market analyst at online broker IG. 

• Additional reporting Reuters