Oil rises to $ 76 due to speculation of Omicron-related fall Reuters

Author: Alex Lawler

LONDON (Reuters) – Oil bounced back almost 5% to $ 76 a barrel on Monday, with some investors seeing Friday’s oil and financial markets plummeting.

Although the World Health Organization warned that understanding the severity of the variant could take several weeks, a South African doctor who treated the cases said the symptoms of the variant had so far been mild.

It was $ 3.41 or 4.7% higher at $ 76.13 for 0920 GMT, after falling $ 9.50 on Friday. US West Texas Intermediate (WTI) crude was up $ 3.07 or 4.5% from $ 71.22, down from $ 10.24 in the previous session.

“We saw some corrections because of the excessive fall in oil prices on Friday,” said Tatsufumi Okoshi, senior economist at Nomura Securities.

European stocks also bounced back on Monday as safe haven bonds lost ground. Crude had its biggest one-day drop since April 2020 on Friday, as investors feared the measures to contain the virus would dampen demand for travel bans.

“I can’t help but say that Friday’s lows were probably the bargain of the year if you were an oil buyer, speculative or physical,” OANDA broker Jeffrey Halley said.

Japan said on Monday it would close borders to foreigners as the world’s third-largest economy joined forces with Israel to take the toughest measures against the variant.

The creation of Omicron has created a new challenge for the Organization of the Petroleum Exporting Countries and its allies, under the name OPEC +, who will meet this week to implement the policy.

The group has postponed technical meetings this week to gain time to assess the impact of Omicron on demand, but Russia has said it sees no urgent action in the market, underestimating the possibility of changes to the OPEC + oil deal.

Also on the radar of the oil market this week, talks to revive Iran’s 2015 nuclear deal, which could add to global supply if reached, will begin on Monday.