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Oil prices extend their rise to 3%.. Brent crude exceeds $75 With Omicron’s fears receding

  • 07 December, 2021
  • 5:46 pm EET

Oil prices raised their gains by more than 3%, in trading today, Tuesday, with Brent crude rising above $ 75, with the easing of concerns about the impact of the new Corona mutation, Omicron, on global oil demand.

Oil prices continued to rise after expanding their gains at the close of trading on Monday by about 5%, coinciding with the faltering Iranian nuclear talks, which delays the return of Iranian crude to global markets.

 

Oil Prices Today

The price of futures contracts for West Texas Intermediate crude – January delivery – increased by 3.2%, recording 71.76 dollars per barrel.

Brent crude futures prices – for February 2022 delivery – also rose by 2.7%, recording $75.11 a barrel.

 

Mutant Omicron

Oil prices fell last week, due to concerns that vaccines may be less effective against the Omicron mutant, which raised fears that governments may re-impose restrictions to limit its spread, and harm global growth and demand for crude.

For his part, a South African health official reported that Omicron’s cases showed only mild symptoms, which was confirmed by the US infectious disease official, Anthony Fauci, who said: “There does not appear to be a significant degree of severity yet.”

“This reduces the likelihood of the worst-case scenario that oil markets have been predicting for the past two weeks,” ANZ analysts said in a note, Reuters reported.

 

Aramco Prices

In another sign of confidence in oil demand, Saudi Aramco, the world’s largest oil exporter, raised monthly crude prices last Sunday, after the Organization of the Petroleum Exporting Countries (OPEC) and its allies from abroad, led by Russia, in the OPEC + alliance, agreed to continue increasing the increase in oil prices. Production increased by 400,000 barrels per day in January, despite the release of the Strategic Petroleum Reserve by the United States and a number of countries.

Crude imports in China, the world’s largest importer, also rebounded in November, and a Reuters poll showed that US crude stocks likely fell for the second week in a row, last week.

 

Nuclear Talks

In addition, the return of Iranian oil subsidized by prices has been delayed, as indirect nuclear talks between the United States and Iran have reached a dead end, and Germany urged Iran on Monday to present realistic proposals in the talks over its nuclear program.

“While negotiations could still be a success when they resume later this week, markets may need to consider a longer-term delay in Iranian oil exports,” said Vivek Dar, commodity analyst at Commonwealth Bank.

For his part, OANDA analyst Edward Moya confirmed: “This is positive for oil prices, and supports OPEC+’s plans to increase oil production until 2022.”

Meanwhile, Iraq also expressed optimism about demand and rising prices, while global oil and gas executives warned of a lack of investment and the need for fossil fuels, despite the push for cleaner energy.

 

SOURCE : REUTERS

 

 

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