The bullion might be in consolidation for a week or two before resuming the upward march towards $2,000, analyst says
The troubled National Health Service now has 6.6-million patients waiting to see GPs, get scans or have operations
Sars and corruption busters need more tools to investigate, says Edward Kieswetter
The ruling party gathering hit by litigation and a breach of security allegedly leading to the cloning of delegates’ tags
Group headline earnings rose to more than a quarter above 2019 levels, with the bank also more optimistic than others about the year
Consumer finances crumble under the pressure of rising prices and interest rates, Unisa vulnerability report shows
Group homes in on home deliveries trend and hopes to supply electricity to Eskom
Anniversary of country's World War 2 surrender marked by cabinet members in move set to anger China and South Korea
Reece James seemed to have sealed the points for the hosts with a 77th-minute goal, but the striker scored in stoppage time
Pharmaceutical giant has been forced to pay $3.5bn in settlements so far to resolve cancer cases
Oil rose to nearly $84 a barrel on Tuesday, supported by tight supply and expectations that rising coronavirus cases and the spread of the Omicron variant will not derail a global demand recovery.
A lack of capacity in some countries has meant that supply additions by the Organisation of the Petroleum Exporting Countries (OPEC) are running below the increase permitted under a pact with its allies.
On the demand side, Federal Reserve chair Jerome Powell said on Tuesday he expects the economic impact of Omicron to be short-lived, adding that ensuing quarters could be very positive for the economy after the surge driven by the variant subsides.
Brent crude gained $2.85, or 3.52%, to $83.72 a barrel, its highest price since early November, after having lost 1% in the previous session.
US West Texas Intermediate (WTI) rose $2.99, or 3.8%, to $81.22, also its highest price since mid-November. On Monday, it fell 0.8%.
"Combination of facts — that demand is going to be stronger than anticipated and that Opec’s supply may not grow as fast as the demand — is why prices are climbing," said Phil Flynn, senior analyst at Price Futures Group.
Major economies have avoided a return to severe lockdowns, even as Covid-19 infections have soared. European jet fuel refining margins, for example, are back to pre-pandemic levels as supplies in the region tighten and global aviation activity recovers despite the spread of Omicron.
"Omicron has yet to wreak the havoc of the Delta variant and may never do so, keeping the global recovery on track," said Jeffrey Halley, analyst at brokerage Oanda.
The US government on Tuesday also estimated that US oil output would be lower in 2022 than previously expected, while total oil demand would be higher than earlier forecast.
Production is estimated to rise by 640,000 barrels per day this year, lower than the previous month’s forecast of a 670,000 bpd rise, and expected to increase by another 610,000 bpd in 2023.
Total oil demand is now expected to rise by 840,000 bpd for the year, higher than the 700,000-bpd increase expected last month. It is estimated to rise by another 330,000 bpd in 2023.
Brent rose by 50% in 2021 and has rallied further in 2022, with investors expecting increasing demand while OPEC and its allies, collectively known as Opec+, slowly ease record output cuts made in 2020.
Recent outages in Libya have also buoyed prices, and the National Oil Corporation said on Tuesday it was suspending exports from the Es Sider terminal.
A weaker US dollar also helped to support oil because it makes oil cheaper for buyers holding other currencies and tends to reflect higher risk appetite among investors.
Upcoming reports on US inventories are expected to show crude stockpiles fell by about 2-million barrels.
Would you like to comment on this article? Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.