Oil recovers losses, focusing on omicron variant of Covid, talks with Iran
Oil pumping platforms are located next to a table grape vineyard, seen July 8, 2021, north of Bakersfield, California.
George Rose | Getty Images
Oil prices rose on Monday, recouping some losses after Friday’s drop of around $ 10 a barrel, as investors looked for bargains but remained cautious by focusing on the omicron coronavirus variant and negotiations on the Iran nuclear deal.
Brent crude futures soared $ 3.05, or 4.2%, to $ 75.77 a barrel at 0014 GMT, after falling $ 9.50 on Friday.
U.S. West Texas Intermediate (WTI) crude rose $ 3.27, or 4.8%, to $ 71.42 a barrel, after falling $ 10.24 in the previous session.
Oil prices slumped along with other financial markets by more than 10% on Friday, their biggest one-day drop since April 2020, as the new variant spooked investors and added to fears that a surplus of supply does not swell in the first trimester.
“There have been correctional buying on views that the oil market was oversold last week and on speculation that OPEC + could take action against the Omicron, potentially cutting production,” said Hiroyuki Kikukawa, Managing Director of Research at Nissan Securities.
“All eyes will be on how the omicron affects the global economy and fuel demand, the action of OPEC + and the Iranian nuclear talks this week,” he said.
The omicron variant of the coronavirus spread around the world on Sunday, with new cases found in the Netherlands, Denmark and Australia even as more countries impose travel restrictions.
The World Health Organization (WHO) said it was not yet clear whether omicron, first detected in southern Africa, is more transmissible or dangerous than other variants.
The Organization of the Petroleum Exporting Countries and Allies (OPEC +) have postponed technical meetings until later this week, giving themselves more time to assess the impact of the Omicron variant on oil demand and prices, according to reports. OPEC + sources and documents.
OPEC + will meet on Thursday instead of Tuesday, when a political decision will likely be announced on whether to adjust its plan to increase production to 400,000 barrels per day in January and beyond.
OPEC + released 400,000 barrels of oil per day per month while reducing its record reductions from last year.
Some analysts have suggested that the group may halt increases after the release of stocks by oil-consuming countries and the possible repercussions on demand of the new lockdowns to contain the new variant.
Meanwhile, talks to revive the 2015 Iran nuclear deal are set to resume in Vienna on Monday, with Iran’s atomic advances casting doubt on the possibility of a breakthrough to bring Tehran and the United States back into full compliance. with the agreement.