Oil prices turn higher, and US crude is above $72

  • 08 December, 2021
  • 5:58 pm EET

Oil prices turned higher, in trading today, Wednesday, with US crude trading above $72, with the official data on crude inventories in the United States awaited.

Investors are waiting to assess the full impact of the novel coronavirus mutated Omicron on the global economy and oil demand, as well as the efficacy of existing vaccines.

And the American company, Pfizer, stated, in a statement issued today, that preliminary studies indicate that the third dose of its vaccine against the Corona virus may provide protection against the Omicron mutant.


Oil prices today

Brent crude futures prices – for February 2022 delivery – rose by 0.4%, recording $75.74 a barrel, after falling at $74.38 a barrel earlier in trading.

The price of West Texas Intermediate crude futures – January delivery – rose 0.3%, to $72.23 a barrel.

Oil prices rose by about 4%, at the close of trading on Tuesday, to record the highest level in two weeks, to continue achieving gains for the second consecutive session, after rising on Monday by about 5%.


Mutant omicron

“The recovery took a respite as investors tried to confirm the full impact of the omicron mutating before buying more,” said Rakuten Securities, commodities analyst Satoru Yoshida.

The head of research at a laboratory at the Africa Institute of Health in South Africa said Tuesday that the Omicron mutant could partially evade protection from two doses of the Pfizer vaccine.

Meanwhile, British pharmaceutical company GlaxoSmithKline “GSK” said that an antibody-based Covid-19 treatment is effective against all mutations in the omicron mutant.


Watch out for the oil markets

“Investors are still not entirely optimistic and are taking a wait-and-see approach for now,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

He added that the market is also focused on Iranian nuclear talks, tensions between Russia and Ukraine, and winter weather in the northern hemisphere.

Indirect talks between Washington and Tehran on restoring the nuclear deal resumed a week ago, but were halted last Friday, and are scheduled to resume later this week, as Western officials expressed dissatisfaction with Iranian demands.

A German Foreign Ministry spokeswoman said on Monday that Germany wants Iran to present realistic proposals in talks over its nuclear programme.


The Russian-Ukrainian crisis

Meanwhile, President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose “economic and other strong measures” on Russia if it invaded Ukraine, while Putin demanded guarantees that NATO would not expand eastward.

Biden warned Putin that he could face tough economic sanctions and disrupt the Nord Stream 2 gas pipeline to Europe, and that the United States and European allies would provide Ukraine with additional defensive capabilities.


US oil stocks

Oil markets reacted little to the US oil inventories data, as crude stocks fell last week, while gasoline and distillate stocks rose.

The American Petroleum Institute announced a decrease in inventories last week by about 3 million barrels, while it was expected to rise by about two million barrels. Which means that the difference is 5 million barrels.

Official data is scheduled to be released by the US Energy Information Administration later in the day.





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