Brent is approaching $ 80 because the market is in favor of Omicron

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices extended gains on Tuesday in a $ 80-barrel deal, despite a rapid spread of the Omicron coronavirus variant, fueled by supply disruptions and expectations that US inventories fell last week.

Gross Brent rose 55 cents or 0.7% to $ 79.15 a barrel for 1410 GMT after reaching a session high of $ 79.85. US West Texas Intermediate (WTI) crude rose 73 cents, or 1% to $ 76.30 after rising to $ 76.92.

Both contracts were negotiated at the highest level of the month.

“Another major drop in production is expected in Ecuador, Libya and Nigeria, and another major drop in inventories,” said UBS oil analyst Giovanni Staunovo.

The three oil producers have declared essential cases in part of their oil production this month due to maintenance problems and the closure of oil fields.

Meanwhile, a preliminary Reuters poll showed on Monday that U.S. crude oil inventories are likely to fall for the fifth week in a row, and gasoline inventories were mostly unchanged last week. [EIA/S]

England will not have any further reductions in COVID-19 until the end of 2021, British Health Minister Sajid Javid said on Monday as the government waits for further evidence that the health services can cope with high infection rates.

U.S. President Joe Biden, meanwhile, pledged to alleviate the shortage of COVID-19 testing because the Omicron variant threatens to overwhelm hospitals and stifle travel plans.

The shortage of staff caused by Omicron canceled thousands of flights over the Christmas weekend in the United States.

China’s symptomatic coronavirus case rose for the fourth day in a row on Monday, with Xian reporting more infections in an outbreak that put the city’s 13 million residents under blockade.

Investors are awaiting the January 4 OPEC + meeting, and the alliance will decide whether to start increasing production to 400,000 barrels a day in February.

At its last meeting, OPEC + maintained plans to increase production in January, despite Omicron.

Russia is unlikely to reach its pre-pandemic oil production target in May due to a lack of spare production capacity, but analysts and company sources said on Tuesday that it could do so later in the year.

Managers raised their gross future for the U.S. and clear positions of opportunity in the week leading up to Dec. 21, the U.S. Future Trade Commission said Monday.

The speculative group rose 4,634 contracts in New York and London along with 259,093 contracts in its future and position position over the period.