Oil price edges higher on waning fears of Omicron's effects


Brent crude futures settled at US$75.82, up 38 cents, or 0.5%. U.S. West Texas Intermediate crude ended at $72.36 a barrel, up 31 cents or 0.4%.

NEW YORK: Oil prices ended higher in a back-and-forth session on Wednesday, maintaining a positive tone as investors no longer expect the Omicron coronavirus variant to derail global economic growth.

Brent crude futures settled at US$75.82, up 38 cents, or 0.5%. U.S. West Texas Intermediate crude ended at $72.36 a barrel, up 31 cents or 0.4%.

Global benchmark Brent has rebounded by about 10% since Dec. 1 on the expectation that Omicron will have only a limited impact on oil demand, after a 16% drop since Nov. 25. Early studies suggest two shots of the Pfizer-BioNTech shot may protect only partially against Omicron, but a third dose https://www.reuters.com/business/healthcare-pharmaceuticals/biontech-pfizer-say-test-shows-3-doses-vaccine-neutralise-omicron-2021-12-08 may improve that protection.

"Some of those Omicron oil demand-related concerns might have been too pessimistic, and hence with some positive news related to Omicron being released in recent days, oil prices recovered," said Giovanni Staunovo, commodity analyst at UBS.

The market had a muted reaction to U.S. weekly inventory figures. Crude stocks fell by 240,000 barrels and gasoline and distillate stocks increased as refiners picked up production. At the same time, however, U.S. product supplied by refineries, a proxy for demand, hit 20.9 million barrels per day over the past four weeks - exceeding pre-pandemic rates of consumer use.

The market expects that supply will exceed demand by early 2022, due to rising U.S. production and ongoing supply additions from the Middle East.

Ultimately, the Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, chose to maintain its schedule of boosting supply by 400,000 bpd every month - despite fears that the new variant would sap demand.

The White House and Tehran have restarted talks over Iran's nuclear program, but an agreement to revive the 2015 deal that limited Iran's nuclear development is still far off, and Western officials have voiced dismay https://www.reuters.com/world/middle-east/iran-nuclear-talks-seen-resuming-thursday-france-discouraged-2021-12-07 at sweeping Iranian demands.

Tensions between Western powers and Russia over Ukraine also remained high after U.S. President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose "strong economic and other measures https://www.reuters.com/markets/currencies/biden-putin-set-crucial-call-over-ukraine-2021-12-07 " on Russia if it invades Ukraine, while Putin demanded guarantees that NATO would not expand farther eastward.

"All of these hot spots tells the marketplace we have added risk and when we do, prices go up," said Tim Snyder, economist at Matador Economics in Dallas.- Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Oil price , Brent , oil , West Texas Intermediate , WTI , Opec+ , Omicron ,

   

Next In Business News

Govt decides to maintain electricity tariff from Feb 1, 2022 to Dec 31, 2024
Top Builders triggers PN17 criteria
Sunway REIT net property income up 86.5% in Q6 FP2021
TNB gets nod for RP3; electricity tariff remains
Inta Bina secures RM160.6mil construction contract
Financial Sector Blueprint 2022-2026 initiatives complement current banking infrastructure
Boustead, Boustead Plantations appoint new directors
KLCC REIT returns to the black in 4Q
SDP's report on forced labour allegation close to completion
Bursa Malaysia ends broadly higher

Others Also Read


Vouchers