Ana sayfa » Oil prices rose as concerns over the impact of the Omicron variant on global fuel demand eased

Oil prices rose as concerns over the impact of the Omicron variant on global fuel demand eased

The delay in the return of Iranian oil also supported prices

by BUNKERIST

Oil prices rose on Tuesday after rebounding nearly 5% the previous day as concerns over the impact of the Omicron variant on global fuel demand eased and Iran nuclear talks faced hurdles and delayed the return of Iranian crude oil supply.

Brent crude futures rose 60 cents, or 0.8%, to $73.68 a barrel at 0520 GMT, after gaining 4.6% on Monday.

West Texas Intermediate (WTI) crude was up 74 cents, or 1.1%, to $70.23 per barrel, on top of a 4.9% gain in the previous session.

Oil prices fell sharply last week amid concerns over the impact of vaccines against the novel coronavirus variant Omicron, fueling fears that countries will impose restrictions to curb the spread of the epidemic, global growth will be hit and oil demand will plummet.

But in South Africa, the country where Omicron cases were first detected, a health official reported over the weekend that cases of Omicron showed only mild symptoms. Also, Anthony Fauci, the top US infectious disease official, said in a statement that “it does not look like much of a serious situation so far”. The good news regarding the pandemic lowers the likelihood of a worst-case scenario oil markets have been pricing.

In another indication of confidence in oil demand, the world’s largest exporter, Saudi Arabia, increased its monthly crude oil prices on Sunday. The decision comes after the Organization of the Petroleum Exporting Countries and its allies agreed to continue increasing production by 400,000 barrels per day in January despite the US releasing its strategic oil reserves.

Crude oil imports from China, the world’s largest importer, also recovered in November.

In addition, the delay in the return of Iranian oil also supported prices. Indirect US-Iran nuclear talks hit roadblocks. Germany on Monday urged Iran to offer realistic proposals in talks on its nuclear program.

The incidence is actually positive for the rise in oil prices and supports OPEC+’s plans to increase oil production by 2022.

Meanwhile, global oil CEOs care about the need for fossil fuels, warning the producers regarding underinvestment despite pressures for cleaner energy.

There are many factors that suggest that the oil market, which has found strong support in the $60s, will be vulnerable to some deficits over the next few years, however, it looks like the big drop in oil prices is over.