Oil prices extended their gains to more than 6.5%, during trading today, Monday, to exceed Brent crude, the level of 76 dollars a barrel, to compensate for some sharp losses in the previous session.
The increase in oil prices came amid speculation that OPEC + may stop increasing production in response to the Omicron spread, but markets remain cautious in light of the lack of much information available on the new Corona mutant.
Oil prices had fallen by more than 13%, at the end of Friday’s trading, the largest drop in one day since April 2020, with renewed fears of a slowdown in demand, after the emergence of a new variable from the Corona virus, for prices to record strong weekly losses.
Oil Prices Today
Brent crude futures prices – for January 2022 delivery – rose by 5.6%, recording $76.72 a barrel.
The prices of West Texas Intermediate crude futures – January delivery – also rose by 6.6%, recording $ 72.65 a barrel.
Oil markets are in a state of caution, amid fears that the novel coronavirus mutant, Omicron, may impede the global economic recovery; This could hurt oil demand, while also adding to fears that oversupply could swell in the first quarter, as a number of countries led by the United States pulled out of the Strategic Petroleum Reserve.
“We saw some correction as oil outperformed its price decline on Friday,” said Tatsufumi Okoshi, chief economist at Nomura Securities.
He added, “If the market declines further, OPEC + may stop the planned increase in crude production to support prices.”
The Omicron mutant spread around the world on Sunday, with new cases discovered in the Netherlands, Denmark and Australia even as more countries imposed travel restrictions.
The World Health Organization said it was not yet clear if Omicron, which was first discovered in South Africa, was more transmissible or dangerous than the other variants.
The top US infectious disease official, Anthony Fauci, told President Joe Biden on Sunday that it would take about two weeks to get definitive information on Omicron.
The Organization of Petroleum Exporting Countries and its allies in the “OPEC +” alliance postponed technical meetings until later this week; To give themselves more time to assess Omicron’s impact on oil demand and prices, according to sources in OPEC+, Reuters reported.
The meeting of the OPEC Joint Ministerial Monitoring Committee was postponed from Tuesday to Thursday, and OPEC + ministers will also meet on Thursday; It is likely that a decision on production policy and if to adjust the plan to increase production by 400,000 barrels per day in January and beyond.
Some analysts suggested that the group may pause the increases after the release of stocks by oil consuming countries and the potential demand repercussions of new closures to contain the new Corona mutation.
“All eyes will be on how Omicron will affect the global economy, fuel demand, OPEC+ actions and the Iran nuclear talks this week,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Talks on reviving the 2015 Iran nuclear deal are set to resume in Vienna on Monday; The Iranian nuclear advances raised doubts about the possibility of a breakthrough to bring Tehran and the United States back into full compliance with the agreement.
SOURCE : REUTERS