Crude oil climbs up further as Omicron fear retreats

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Crude oil climbs up further as Omicron fear retreats

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 Crude oil climbs up further as Omicron fear retreats
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Highlights

  • Crude oil price climbs nearly 3% on Tuesday.
  • Crude oil prices tumbled during the last week.
  • Saudi Arabia increased the selling price of all crude grades from Sunday.

Crude oil price rises nearly 3% on Tuesday, extending the previous day's gains as concerns related to fuel demand amid rising Omicron infected cases retreated further. A few weeks earlier, South Africa found that the positive cases infected by the new variant had mild symptoms.

February delivery Brent Crude oil futures last traded at US$72.13 per barrel up 0.11%, whereas January delivery WTI crude oil futures traded 0.17% up at US$72.17 per barrel as of 8 December 2021 at 12:11 PM AEDT.

Impact of Omicron on crude oil’s prices

Crude oil prices tumbled during the last week on concerns that vaccines would be less effective on the new variant of coronavirus which could prompt the government to impose new lockdowns again, pressurising oil demand.

However, the top infectious disease official of the US, Anthony Fauci stated that there is low severity with the new variant so far.

OPEC

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During the last week, the Organisation of the Petroleum Exporting Countries along with its allies, together known as OPEC+ agreed to go with its initial plan of increasing the output by 400,000bpd in January.

Additionally, Saudi Arabia, the world’s top-most exporter of crude oil increased monthly crude prices on Sunday.

Furthermore, oil prices are also supported due to delays in the return of Iranian oil with an indirect nuclear deal between Iran and the US.

Bottom Line

Crude oil prices rose nearly 3% on Tuesday in hopes that the new variant of coronavirus is not so severe, and it would not affect the oil demand.

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