Oil stability near $ 75 when investors assess the impact of Omicron

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London — Investors continue to assess the impact of the Omicron coronavirus variant on the global economy and fuel demand, and oil prices stabilize at near $ 75 a barrel on Wednesday, taking a break after a strong rise earlier this week. rice field.

Brent crude oil futures rose 3.2% on Tuesday and then fell 19 cents (0.25%) at 0925 GMT to $ 75.25 a barrel. US West Texas intermediate crude was $ 71.78 a barrel, up 3.7% in the previous session and down 27 cents (0.4%).

Brent crude oil prices have fallen more than 16% since November 25 to around $ 69 a barrel, but due to signs that Omicron has so far had a limited impact on oil demand, December It rebounded by nearly 10% from the 1st.

“Approximately two-thirds of the previous price slide has been fixed. This is a downtrend caused by demand concerns caused by the new Omicron variant. These now appear to be exaggerated.” Said Commerzbank in a memo.

“There is still no noticeable slowdown in oil demand. Even the aviation sector, which was originally supposed to be hit, saw only a slight reduction in seat numbers.”

Omicron variants have been reported in 57 countries, with an increasing number of cases of COVID-19 in southern Africa, including Zimbabwe, and the number of patients requiring hospitalization is likely to increase as the world expands. The health agency said on Wednesday.

Markets are also experiencing heightened geopolitical tensions as negotiations between Washington and Tehran over Iran’s nuclear program were scheduled to resume this week as Western officials expressed disappointment in clearing Iran’s demands. I was focusing.

Relaxation of US sanctions is expected to lead to higher oil exports in Iran, which could put downward pressure on oil prices.

Meanwhile, Western countries and Russia over Ukraine after President Joe Biden warned Russia’s President Vladimir Putin on Tuesday that the West would impose “strong economic and other measures” on Russia if it invaded Ukraine. The tension between them also remained high. Do not expand further east.

The oil market has barely responded to US weekly inventory data.

US crude oil inventories fell last week, while gasoline and distillate inventories increased, according to market sources citing figures from the American Petroleum Institute on Tuesday.

Analysts surveyed by Reuters predict that US crude oil inventory data will decline for the second straight week.

Ron Busso

Reuters

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