Oil prices start the new year firmer on tight supply, easing Omicron fears
Oil rose towards $79 a barrel on hopes of further demand recovery in 2022
03 January 2022 - 14:59
byAlex Lawler
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London — Oil rose towards $79 a barrel on Monday supported by tight supply and hopes of further demand recovery in 2022 spurred in part by a view that the Omicron coronavirus variant is unlikely to significantly dampen the outlook.
Libyan oil output will be cut by 200,000 barrels per day for a week due to pipeline maintenance. Oil cartel Opec and its allies, known as Opec+, are expected to stick to a plan to raise output gradually at a meeting on Tuesday.
Brent crude rose 95 cents, or 1.2%, to $78.73 a barrel as of 0.23am GMT. US West Texas Intermediate (WTI) crude added $1.03 or 1.4%, to $76.24.
“Infection rates are on the rise globally, restrictions are being introduced in several countries, the air travel sector, among others, is suffering, yet investors’ optimism is tangible,” said Tamas Varga of oil broker PVM.
“It seems that the current strain produces less severe symptoms than its predecessors, which might just help us to struggle through the fourth wave of the pandemic.”
Last year, Brent rose 50%, spurred by the global recovery from the Covid-19 pandemic and Opec+ supply cuts, even as infections reached record highs worldwide.
Some see more gains in 2022.
“Crude and oil product prices should benefit from oil demand moving above 2019 levels,” said a report from UBS analysts including Giovanni Staunovo. “We expect Brent to rise into a $80—90 range in 2022.”
Omicron has brought record case counts and dampened New Year festivities around the world, with more than 4,000 flights cancelled on Sunday.
Nonetheless, an Opec+ report seen by Reuters on Sunday, ahead of Tuesday’s policy meeting, said Omicron’s impact was expected to be mild and short-lived.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil prices start the new year firmer on tight supply, easing Omicron fears
Oil rose towards $79 a barrel on hopes of further demand recovery in 2022
London — Oil rose towards $79 a barrel on Monday supported by tight supply and hopes of further demand recovery in 2022 spurred in part by a view that the Omicron coronavirus variant is unlikely to significantly dampen the outlook.
Libyan oil output will be cut by 200,000 barrels per day for a week due to pipeline maintenance. Oil cartel Opec and its allies, known as Opec+, are expected to stick to a plan to raise output gradually at a meeting on Tuesday.
Brent crude rose 95 cents, or 1.2%, to $78.73 a barrel as of 0.23am GMT. US West Texas Intermediate (WTI) crude added $1.03 or 1.4%, to $76.24.
“Infection rates are on the rise globally, restrictions are being introduced in several countries, the air travel sector, among others, is suffering, yet investors’ optimism is tangible,” said Tamas Varga of oil broker PVM.
“It seems that the current strain produces less severe symptoms than its predecessors, which might just help us to struggle through the fourth wave of the pandemic.”
Last year, Brent rose 50%, spurred by the global recovery from the Covid-19 pandemic and Opec+ supply cuts, even as infections reached record highs worldwide.
Some see more gains in 2022.
“Crude and oil product prices should benefit from oil demand moving above 2019 levels,” said a report from UBS analysts including Giovanni Staunovo. “We expect Brent to rise into a $80—90 range in 2022.”
Omicron has brought record case counts and dampened New Year festivities around the world, with more than 4,000 flights cancelled on Sunday.
Nonetheless, an Opec+ report seen by Reuters on Sunday, ahead of Tuesday’s policy meeting, said Omicron’s impact was expected to be mild and short-lived.
Reuters
Oil prices lift ahead of Opec+ meeting later in the week
Oil prices eye biggest annual gains in 12 years
Opec+ likely to continue policy of modest monthly increases in oil output, sources say
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