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Brent near $80 as market shrugs off Omicron

Brent crude rose by $1.04, or 1.3%, to $79.64 a barrel by 1119 GMT. U.S. West Texas Intermediate (WTI) crude rose $1.15, or 1.5%, to $76.72.

December 28, 2021 / 05:35 PM IST
Representative image (Source: Reuters)

Representative image (Source: Reuters)

Oil prices extended gains on Tuesday, with Brent crude trading near $80 a barrel despite the rapid spread of the Omicron coronavirus variant, supported by supply outages and expectations that U.S. inventories fell last week.

Brent crude rose by $1.04, or 1.3%, to $79.64 a barrel by 1119 GMT. U.S. West Texas Intermediate (WTI) crude rose $1.15, or 1.5%, to $76.72.

Both contracts traded at their highest in a month.

"Support comes as well from high aggregated production disruptions in Ecuador, Libya and Nigeria and the expectation of another large drop in U.S. crude inventories," said UBS oil analyst Giovanni Staunovo.

The three oil producers declared force majeures this month on part of their oil production because of maintenance issues and oilfield shutdowns.

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Meanwhile, a preliminary Reuters poll showed on Monday that U.S. crude oil inventories are likely to have dropped for the fifth week in a row, while gasoline inventories were seen mostly unchanged last week.

Investors are awaiting an OPEC+ meeting on Jan. 4, at which the alliance will decide whether to go ahead with a planned production increase of 400,000 barrels per day in February.

At its last meeting, OPEC+ stuck to its plans to boost output for January despite Omicron.

Money managers raised their net long U.S. crude futures and options positions in the week to Dec. 21, the U.S. Commodity Futures Trading Commission said on Monday.

The speculator group raised its combined futures and options position in New York and London by 4,634 contracts to 259,093 during the period.
Reuters
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