Oil Up, Concerns About Omicron Impact Continue to Fall By

© Reuters.

By Gina Lee – Oil was up Monday morning in Asia, as fears over the omicron COVID-19 variant’s impact on the economic recovery and fuel demand continue to ease.

rose 1.52% to $76.29 by 10:26 PM ET (3:26 AM GMT) and jumped 1.59% to $72.81. Both Brent and WTI futures gained around 8% last week, the first weekly gain in seven.

“Market sentiment has improved as the threat of the omicron variant has receded. WTI futures will probably test its recent high of $73.34 and then try to rise towards $78, the level before the Omicron fears led to a sharp sell-off in late November,” Fujitomi Securities Co Ltd. analyst Toshitaka Tazawa told Reuters.

While scientists continue researching omicron, U.K. Prime Minister Boris Johnson warned that the U.K. could face a “tidal wave” of omicron infections.

However, investors remained cautious due to the U.S.-led coordinated release of crude reserve and tensions between Russia and Ukraine.

The U.S. Department of Energy said on Friday it will sell 18 million barrels of crude oil from its strategic petroleum reserve (SPR) on Dec. 17, continuing its strategy to reduce gasoline prices.

On the geopolitical front, the Group of Seven warned Russian President Vladimir Putin that there would be “massive consequences” should Russia attack Ukraine. Russia could be planning a multi-front offensive on Ukraine as early as next year, involving up to 175,000 troops, according to U.S. intelligence.

Meanwhile, Iraqi oil minister Ihsan Abdul Jabbar said on Sunday he expected the Organization of the Petroleum Exporting Countries will continue its current policy of gradual monthly increases in supply by 400,000 bpd at its next meeting in January 2022.

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