Thursday, 20 January 2022

Oil rebounds towards $72 on Omicron hopes

Oil rebounds towards $72 on Omicron hopes

Oil mount by $2 a barrel towards $72 on Monday, hoping that the Omicron coronavirus variant would have a less harmful economic impact if its symptoms proved mild primarily and as the hope of an imminent rise in Iranian oil exports receded.

Reports in South Africa said Omicron cases had only shown mild symptoms. Anthony Fauci, the U.S top infectious disease official, told CNN, "it does not look like there's a great degree of seriousness" so far.

Brent crude gained 1.9% or $1.35, to $71.23 a barrel by 1439 GMT, while U.S. West Texas Intermediate crude advanced to 2.2%, or $1.43, to $67.69. Both benchmarks fell for a row last week in the sixth week.

Jeffrey Halley, an analyst at brokerage OANDA said.

 "If Omicron is proven over upcoming days,weeks to be less aggressive, even if it is more contagious, then we can say 100% last week's lows were the bargain of the quarter," 

Oil rebounds towards 72 on Omicron hopes 1unsplash image

Read More: Govt removes Agri cess and cut import duty on edible oils till March 2022

This year, Brent has risen 38%, supported by output restriction led by the OPEC+ producer's group, though it has down from a three-year high above $86 in October.

"Traders are brushing off the initial panic over the Omicron variant," said Louise Dickson of Rystad Energy. "The oil market seems to now be convinced that higher price levels are warranted."

LAST WEEK, the OPEC+ group, comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, decided to increase monthly supply by 400,000 barrels per day (BPD) in January, even after a slow down in prices driven by Omicron concerns.

On Sunday, Saudi Arabia raised January's official selling prices for all crude grades sold to the United States and Asia by up to 80 cents from the previous month.

Oil was also buoyed by diminishing prospects of a rise in Iranian oil exports after indirect U.S.-Iranian talks on saving the 2015 Iran nuclear deal broke off last week.

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