Oil prices rose on Tuesday, but investors remain concerned about the rapid spread of the Omicron coronavirus variant globally, which has prompted countries to consider further restrictions, potentially reducing fuel demand.
After a tough few days, crude oil prices are rebounding as much of the COVID worry wall has been priced in.
Brent crude futures rose 59 cents, or 0.8%, to $72.11 as of 0418 GMT, while West Texas Intermediate (WTI) crude futures rose 73 cents, or 1.1%, to $69.34 a barrel.
The short-term impact of the pandemic on economic growth is still unknown, and oil prices will continue to be vulnerable to stricter requirements regarding travel restrictions.
New Zealand has delayed the planned reopening of its international border due to the worldwide spread of Omicron on Tuesday, and many other countries have reintroduced social distancing measures.
With Omicron infections skyrocketing in Europe, the United States and Asia, many countries, including Japan, are on high alert ahead of Christmas and New Year’s celebrations.
Still, investors were hopeful when Moderna Inc said Monday that a booster dose of the COVID-19 vaccine appeared to be protective against the Omicron variant in lab tests.
On the supply front, OPEC+ compliance with oil production cuts increased to 117% in November from 116% the previous month, with production levels well below agreed targets.
In the US, distillate and gasoline inventories are expected to increase last week, while crude oil inventories are expected to fall for the fourth week in a row.