Brent near $ 80 as market ignores Omicron

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An aerial view shows an Idemitsu Kosan Co. oil plant in Ichihara, east of Tokyo, Japan, Nov. 12, 2021, in this photo taken by Kyodo. Mandatory Credit Kyodo / via REUTERS

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  • Oil trades at its highest for a month
  • Blackouts in Ecuador, Nigeria, support in Libya
  • US stocks should have fallen last week – Reuters poll

LONDON, Dec.28 (Reuters) – Oil prices extended their gains on Tuesday, with Brent crude trading near $ 80 a barrel despite the rapid spread of the Omicron coronavirus variant, supported by supply outages and expectations of a drop in US stocks last week.

Brent crude rose $ 1.04, or 1.3%, to $ 79.64 a barrel at 11:19 GMT. U.S. West Texas Intermediate (WTI) crude rose $ 1.15, or 1.5%, to $ 76.72.

The two contracts traded at their highest level in a month.

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“Support also comes from strong disruptions to aggregate production in Ecuador, Libya and Nigeria and the expectation of another significant drop in US crude inventories,” said UBS oil analyst Giovanni Staunovo .

All three oil producers this month declared force majeure on part of their oil production due to maintenance issues and oilfield closures. Read more

Meanwhile, a preliminary Reuters poll showed on Monday that U.S. crude oil inventories are expected to have fallen for the fifth week in a row, while gasoline inventories were virtually unchanged last week.

England will not face any new COVID-19 restrictions until the end of 2021, UK Health Minister Sajid Javid said on Monday, as the government awaits more evidence on whether health services can cope with high infection rates. Read more

US President Joe Biden, meanwhile, has pledged to ease the COVID-19 testing shortage as the Omicron variant threatens to overwhelm hospitals and stifle travel plans. Read more

Omicron-induced staff shortages led to thousands of flight cancellations over Christmas weekend in the United States. Read more

Symptomatic cases of coronavirus in China rose for a fourth consecutive day on Monday, with Xian reporting more infections in an outbreak that has taken the city’s 13 million residents into custody. Read more

Investors are awaiting an OPEC + meeting on January 4, at which the alliance decides to go ahead with a planned production increase of 400,000 barrels per day in February.

At its last meeting, OPEC + stuck to its plans to increase production for January despite Omicron.

Fund managers increased their net long positions in US crude futures and options during the week to December 21, the US Commodity Futures Trading Commission said on Monday.

The speculative group increased its combined position on futures and options in New York and London from 4,634 contracts to 259,093 during the period.

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Additional reporting by Mohi Narayan and Naveen Thukral in New Delhi Editing by David Goodman

Our standards: Thomson Reuters Trust Principles.


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