Oil Prices Stable Amid Positive COVID News Constraining Balance

Oil prices remained broadly stable on Thursday as signs that the worst effects of the Omicron option could be more contained than previously feared were countered by new COVID-19 restrictions amid rising infections.

 

Brent crude futures rose 2.07 percent, or $1.56, at $76.85 a barrel after rising 1.8 percent in the previous session. Futures for US west Texas Intermediate (WTI) crude oil rose by 1.03 dollars, or 1.4%, to 73.79 dollars per barrel after rising by 2.3% in the previous session.

 

"The direction of oil movement is entirely dependent on the omicron headlines, and as long as they remain more contagious but less virulent, the oil rally is likely to continue, and intraday fluctuations are exacerbated by low liquidity," said OANDA market analyst Jeffrey Halley.

 

Both contracts are rising for the third day in a row." So far this year, Brent has grown by about 46% and WTI by 50%.

 

Wednesday's big gain was partly driven by a larger-than-expected drawdown in U.S. crude inventories last week.

 

The United States has approved Pfizer Inc.'s COVID-19 antiviral pills for people ages 12 and older, the first oral and home-based drug, as well as a new treatment against a fast-spreading variant of the Omicron virus.

 

Meanwhile, AstraZeneca said a three-dose course of the COVID-19 vaccine is effective against Omicron, citing data from a laboratory study from the University of Oxford.

 

On the other hand, governments have imposed a number of restrictions to slow the spread of Omicron.

 

The Chinese city of Xi'an on Wednesday ordered 13 million residents to stay home, Scotland imposed restrictions on the collection of the population from December 26 for up to three weeks, and two Australian states imposed a ban on wearing masks.

 

The Organization of the Petroleum Exporting Countries (OPEC), Russia and allies have left the door open for a review of their plan to increase supply by 400,000 barrels a day in January.