Oil prices jumped in a light volume session on Thursday amid signs that the ill effects of the Omicron variant may be more manageable than previously feared, despite imposing travel restrictions on rising infection levels by some countries.
The oil market has fluctuated in recent days about how seriously the threat of another decline in fuel demand will be taken.
Early data suggest that the Omicron variant is more contagious than previous coronavirus variants, but causes a milder level of illness.
Brent crude futures rose $1.56, or 2.1%, to $76.85 a barrel, the highest close since November and a gain of 4.5% on the week.
West Texas Intermediate (WTI) crude futures were up $1.03, or 1.4%, to close at $73.79 a barrel, and a gain of 4.1% on the week.
The demand breakdown that everyone thought would happen hasn’t happened yet. However, some governments are implementing stricter travel restrictions to slow the spread of the variant. But that doesn’t mean Omicron won’t lower the demand, even if it does result in a lower level of hospitalization, especially among those vaccinated.
The Chinese city of Xian instructed 13 million residents on Wednesday about curfew, while Scotland imposed gathering limits for up to three weeks from 26 December, and two Australian states reintroduced mask rules as cases escalated.
The United States has allowed separate antiviral COVID-19 pills manufactured by both Pfizer and Merck, and U.S. Food and Drug Administration officials said both drugs are effective against the Omicron variant.
AstraZeneca said that a three-dose course of the COVID-19 vaccine was effective against Omicron, based on data from the University of Oxford laboratory study.
Operating US oil and gas rigs rose to their highest levels since April 2020 in the last week, according to Baker Hughes. The overall count is currently 586 and marks an increase in production in the coming months.
A fire broke out at the Baytown refinery of Exxon Mobil, one of the largest refineries in the USA, with a processing capacity of up to 560,000 barrels per day. The fire has been extinguished and the refinery is trying to recover production.