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An oil tanker is loaded at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. REUTERS/AHMED JADALLAH
An oil tanker is loaded at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. REUTERS/AHMED JADALLAH

Melbourne — Oil prices extended gains on Thursday on confidence that the Omicron coronavirus variant would not dent global growth, even as some governments stepped up curbs to stop its rapid spread.

US West Texas Intermediate (WTI) crude futures rose 28 US cents, or 0.4%, to $72.64 a barrel at 2.01am GMT, adding to a 0.4% gain in the previous session.

Brent crude futures rose 22 US cents, or 0.3%, to $76.04 a barrel, adding to a 0.5% gain on Wednesday.

Markets were buoyed by comments from BioNTech and Pfizer that a three-shot course of their Covid-19 vaccine may protect against infection from the Omicron variant. 

"Early indications of the Omicron variant … suggest that it may be less severe than initially feared given hospitalisation rates have not surged," Commonwealth Bank commodities analyst Vivek Dhar said in a note.

"A third vaccine dose is also showing promising signs of protection against the new variant," he said.

However, market gains were muted as governments re-imposed restrictions to limit the spread of Omicron, including Britain ordering people to work from home again, Denmark closing restaurants, bars and schools and China halting group tourist trips from Guangdong.

"The risks to demand have not entirely diminished," ANZ analysts said in a note.

The Omicron outbreak sparked a 16% slump in Brent prices from November 25 to December 1. More than half of the drop has been recouped this week, but analysts say a further recovery may be limited until Omicron’s effect is clearer.

Oanda analyst Craig Erlam said Brent is likely to face resistance around the lower end of the $76.50-77.50 range, which was a key support level in late September and late November.

Reuters

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