Oil Up, bets grow that major producers will stop adding raw supplies to Omicron according to Investing.com

Author: Gina Lee

Investing.com – Oil rose in Asia on Tuesday morning, following the recovery from last week’s downturn. Investors continue to be skeptical about the new variant of the Omicron coronavirus.

It rose 0.64% to $ 73.69 for 23:28 ET (4:28 AM GMT) and rose 1.03% to $ 70.67. Oil fell about 12% last Friday, fearing the omicron variant would lead to more blockages and more fuel demand.

The World Health Organization said Monday that Omicron was at very high risk for an increase in infections, and described it as a “variant of concern.” Several countries, such as the Netherlands, Denmark and Australia reported omicron cases over the weekend and other countries have set travel limits.

As fuel demand forecasts are unclear, investors expect the Organization of the Petroleum Exporting Countries and their allies (OPEC +) to suspend plans to increase their supply of 400,000 barrels (bpd) per day in January. The poster is set to meet on December 2 to discuss the supply.

“We believe the group will tend to pause production hikes in the wake of the Omicron variant and the release of the major oil consumer oil depot,” Vivek Dhar Commonwealth Bank raw material analyst said in a statement.

OPEC + was already reconsidering its plan after the U.S. and other major consumers announced a lower-than-expected coordinated release from the Strategic Oil Reserve last week.

“Following the release of the world’s strategic reserves and the announcement of dozens of countries restricting travel to South Africa and surrounding countries, OPEC and its allies can easily justify a halt in production or even a small reduction in production,” said OANDA analyst Edward Moya. a note.

Elsewhere, the world powers and Iran embarked on talks to revive the 2015 nuclear treaty, with good diplomatic comments giving the market a boost.

Investors are waiting now, later in the day.