Oil prices climb on easing Omicron fears

Singapore, Dec. 7 (BNA): Oil prices rose on Tuesday after rebounding close to 5% the day before as concerns faded over the impact of the Omicron variable on global fuel demand.

Brent crude futures rose 60 cents, or 0.8 percent, to $73.68 a barrel at 05:20 GMT, after settling up 4.6 percent on Monday. US West Texas Intermediate crude was at $70.23 a barrel, up 74 cents, or 1.1%, building on a 4.9% gain in the previous session.

Oil prices fell last week on fears that vaccines may be less effective against the novel coronavirus variant, Omicron, sparking fears that governments may re-impose restrictions to limit its spread and hurt global growth and oil demand, according to Reuters.

However, a South African health official reported over the weekend that Omicron’s cases there had only been showing mild symptoms. In addition, the US infectious disease official, Anthony Fauci, told CNN that “there does not appear to be a significant degree of severity” yet.

“This reduces the likelihood of the worst-case scenario that oil markets have predicted over the past two weeks,” ANZ analysts said in a note.

And in another sign of confidence in oil demand, Saudi Arabia, the world’s largest exporter, raised monthly crude prices on Sunday. This comes after the Organization of the Petroleum Exporting Countries and its allies, in a group known as OPEC+, agreed to continue increasing production by 400,000 barrels per day in January despite the release of US Strategic Petroleum Reserves.

Crude imports into China, the world’s largest importer, also rebounded in November.

“This is positive for oil prices and supports OPEC+’s plans to increase oil production until 2022.”

Meanwhile, Iraq also expressed optimism about demand and rising prices while global oil and gas executives warned of a lack of investment and the need for fossil fuels despite the push for cleaner energy.

Edward Moya, an analyst at OANDA said in a note.

HF