Oil rises in optimism The impact of Omicron will be limited to fuel demand by Reuters

Author: Yuka Obayashi

TOKYO (Reuters) – Oil prices rose on Monday, extending last Friday’s gains, boosted by the impact of the Omicron coronavirus variant on global economic growth and higher expectations that will limit fuel demand.

futures rose 53 cents, or 0.7%, to $ 75.68 a barrel for 0100 GMT after rising 1% on Friday.

The US West Texas Intermediate (WTI) gained 69 cents, or 1.0%, to $ 72.36 a barrel after rising 1% in the previous session.

The two benchmarks had a gain of about 8% last week, the first gain of the week in seven. More than half of the losses suffered since Omicron exploded on November 25 have been recovered.

“Market sentiment has improved as the threat of the Omicron variant has receded,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.

“WTI is likely to test the latest high of $ 73.34 and then try to rise to $ 78 before Omicron’s fears could lead to a sharp sell-off at the end of last month,” he said.

South African scientists do not see the Omicron variant causing more serious illnesses, they said on Friday as officials announced plans to spread vaccine boosters that daily infections were approaching an all-time high.

The COVID-19 booster shot significantly restores protection against mild illnesses caused by the Omicron variant, the UK Health Safety Agency said on Friday.

However, investors were cautious about the coordinated release of crude oil reserves by US-led oil-consuming countries, as well as tensions between Russia and Ukraine.

The U.S. Department of Energy said on Friday it would sell 18 million barrels of its Strategic Oil Reserve (SPR) on Dec. 17 as part of a previous plan to try to cut gasoline prices.

On Sunday, the Group of Seven warned in a statement that Russia will have serious consequences and serious costs if President Vladimir Putin attacks Ukraine.

U.S. intelligence estimates that Russia may plan a multi-front offensive in Ukraine next year with 175,000 troops.

Meanwhile, the Iraqi oil minister said on Sunday that the Organization of the Petroleum Exporting Countries (OPEC) at its next meeting expected to maintain its current policy of gradually increasing the supply to 400,000 bpd per month.