Oil wins as investors see limited impact from Omicron on demand


Barrels of oil are pictured at the site of Canadian group Vermilion Energy in Parentis-en-Born, France, October 13, 2017. REUTERS / Regis Duvignau

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  • The United States to sell 18 million barrels of oil from the reserve on December 17
  • Iraqi Oil Minister expects OPEC to maintain policy at next meeting
  • Saudi Arabia predicts 7.4% GDP growth in 2022

TOKYO, Dec. 13 (Reuters) – Oil prices extended their rally on Monday as investor appetite improved amid mounting relief, the Omicron coronavirus variant may not cause serious illness and will likely have limited impact on global fuel demand.

Brent futures rose 94 cents, or 1.3%, to $ 76.09 a barrel at 05:00 GMT, after rising 1% on Friday.

US West Texas Intermediate (WTI) gained $ 1.05, or 1.5%, to $ 72.72 a barrel, after rising 1% in the previous session.

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Both benchmarks posted gains of around 8% last week, their first weekly gain in Sept. They have recouped more than half of the losses suffered since Omicron was first released on November 25.

“There was a growing sense of relief that the risk of critical illness in the Omicron was considered low,” said Tatsufumi Okoshi, senior economist at Nomura Securities.

“The market focus has shifted to the next OPEC + move,” he said.

South African scientists see no signs the Omicron variant is causing more serious illness, they said on Friday, as officials announced plans to roll out vaccine boosts with daily infections approaching an all-time high. Read more

The COVID-19 booster injections significantly restore protection against mild illnesses caused by the Omicron variant, British health authorities said on Friday. Read more

Investors are keeping a close watch on the Organization of the Petroleum Exporting Countries and its Allies, a group known as OPEC +, at their next meeting on January 4. They agreed earlier this month to stick to their current policy of increasing monthly oil production. Read more

Iraq’s petroleum minister said on Sunday that he expected OPEC, at its next meeting, to maintain its current policy of gradually increasing monthly supply by 400,000 bpd.

The market reacted little to the US Department of Energy’s announcement last Friday that it will sell 18 million barrels of crude oil from its Strategic Petroleum Reserve (SPR) on December 17, as part of a previous plan. in an attempt to reduce gasoline prices. . Read more

“WTI will likely test its recent high of $ 73.34 and then attempt to climb to $ 78, the level before Omicron fears lead to a massive sell off late last month,” Toshitaka Tazawa said, analyst at Fujitomi Securities Co Ltd.

Saudi Arabia, the world’s largest oil exporter, on Sunday forecast GDP growth of 2.9% this year, followed by 7.4% growth in 2022, according to a budget document.

The kingdom does not disclose the price of oil it assumes to calculate its budget, but Monica Malik, chief economist at Abu Dhabi Commercial Bank, has estimated that it is likely basing its budget for 2022 on a price assumption. oil that could be as low as $ 50 to $ 55. per barrel. Read more

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Reporting by Yuka Obayashi; Editing by Stephen Coates and Sam Holmes

Our Standards: Thomson Reuters Trust Principles.

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