London Jan 11 (BNA): Oil rose to around $82 a barrel on Tuesday, buoyed by tight supply and hopes that rising coronavirus cases and the spread of the Omicron variable will not derail a recovery in global demand.
OPEC supply additions are less than the increase allowed under an agreement with allies due to capacity shortages in some countries. Major economies have avoided returning to severe lockdowns, even as coronavirus cases rise, Reuters reports.
Brent crude rose $1.14, or 1.4 percent, to $82.01 a barrel at 1134 GMT, after falling 1 percent in the previous session. US West Texas Intermediate (WTI) rose $1.16, or 1.5%, to $79.39, after falling 0.8% on Monday.
“Omicron still has to wreak havoc on the delta variant and may never do so, keeping the global recovery on track,” said Jeffrey Haley, analyst at OANDA brokerage.
Brent crude rose 50 percent in 2021 and climbed further in 2022 as investors see demand rising as OPEC and its allies, known as OPEC+, slowly ease record production cuts in 2020.
Outages in Libya also supported prices, and while production rose, the National Oil Corporation said on Tuesday it had suspended exports from Es Sider port.
“The rise in oil production in the country has not yet directly translated into an increase in the available oil supply,” said Carsten Fritsch of Commerzbank. This may explain why oil prices have not yet responded to the reopening of Libyan oil fields.
The weak US dollar also helped support oil as it makes oil cheaper for those who own other currencies and tends to reverse investors’ appetite for risk.
In what may be an additional indication of a supply shortfall, the latest reports on US inventories are expected to show a decline in crude oil stocks by about two million barrels.
The first supply reports this week from the American Petroleum Institute are due at 2130 GMT.