European stock markets fell Thursday with sentiment hit by the first Omicron case in the United States, but oil rallied before an OPEC output call.
Oil prices rose strongly on the expectation that OPEC and its allies will pause their modest monthly crude production increase, while the dollar was mixed on the eve of key US nonfarm payrolls data.
The eurozone, Frankfurt and Paris lost 1.1 percent and 0.7 percent after a mixed Asian session.
In late morning deals, London stocks fell 0.6 percent, with GlaxoSmithKline slipping 0.2 percent despite news that its Covid antibody treatment appeared to be effective against the new Omicron variant.
Wall Street suffered a late plunge on Wednesday after news that Omicron had arrived in the stateside.
The spread of this new enemy has already begun, according to the discovery of US cases of the new variant. The news that a patient had come down with the new variant sent shivers through US investors who fear authorities will have to reintroduce strict containment measures or even lockdowns, damaging the recovery in the world's top economy.
That comes from a widespread belief that the Federal Reserve will end its vast bond-buying financial support programme sooner than expected and hike interest rates next year to prevent inflation, which is now at a three-decade high.
Traders were already feeling uneasy about the rise in prices around the world due to supply chain snarls, a spike in energy costs and a labour shortage, as well as a spike in energy costs.
On Friday, the announcement of Omicron and warnings that vaccines may not be as effective against it sent them over the edge.
Experts say it will take weeks to fully understand the true danger of Omicron, but the World Health Organization said vaccines would probably fend off the worst of the variant.
The impact of Omicron on demand is likely to be on the agenda at the latest meeting of OPEC and other major oil suppliers later Thursday as they discuss their plan to raise output each month to help quell prices.
The grouping has already raised the possibility that it will pause the increases, after being upset by the decision by the United States and other major consumers including China to release some of their own reserves.
Such a move would tighten global supplies and have pushed prices higher.
Oil prices are well below their levels from a week ago, as a result of fears that demand will fall out of Omicron.
Helima Croft, a managing director at RBC Capital Markets, said that the arrival of the Omicron variant and the subsequent sell-off increases the odds that OPEC will choose to hit the pause button.
New York - Dow: DOWN 1.3 percent at 34,022. On Wednesday, the euro dollar went up at $1.1330 from $1.1317 at 2125 GMT.