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Oil rebounds by almost 5% on Omicron hopes, Iran talks

CommoditiesDec 06, 2021 03:16PM ET
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© Reuters. FILE PHOTO: A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson

By Stephanie Kelly

NEW YORK (Reuters) -Oil prices climbed by nearly 5% on Monday on hopes the Omicron coronavirus variant would have a less damaging economic impact if its symptoms proved mostly mild and as some OPEC member countries signaled confidence in the market.

Reports in South Africa said Omicron cases there had only shown mild symptoms and the top U.S. infectious disease official, Anthony Fauci, told CNN "it does not look like there's a great degree of severity" so far.

The White House said on Monday that the U.S. ban on foreign nationals entering the country from eight southern African countries is something President Joe Biden's public health advisers reconsider daily.

Brent crude rose $3.20, or 4.6%, to settle at $73.08 a barrel. U.S. West Texas Intermediate crude rose $3.23, or 4.9%, to settle at $69.49 a barrel.

Last week, both benchmarks fell for a sixth week in a row.

"All the headlines are bullish today," said Phil Flynn, senior analyst at Price Futures Group. "The momentum seems to be jumping back in."

Global benchmark Brent has risen 38% this year, supported by output curbs led by the OPEC+ group of producers, though it has fallen from a three-year high above $86 in October.

Iraq's Oil Minister Ihsan Abdul-Jabbar said he expects oil prices to reach over $75, state news agency INA reported. He added that OPEC is trying to "positively contain" the energy market, INA said.

On Sunday, Saudi Arabia raised January official selling prices for all crude grades sold to Asia and the United States by up to 80 cents from the previous month.

The OPEC+ group, comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, last week decided to continue increasing monthly supply by 400,000 barrels per day (bpd) in January, even after a slide in prices driven by Omicron concerns.

Oil was also buoyed by diminishing prospects of a rise in Iranian oil exports after indirect U.S.-Iranian talks on saving the 2015 Iran nuclear deal broke off last week.

Meanwhile, the World Petroleum Conference devoted to future technologies and low-carbon strategies kicked off in Houston on Monday with top executives from energy companies affirming the need for more oil for decades to come.

"We in fact are going into a period of scarcity. And I think that for the first time, in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer," said Jeff Miller, chief executive of energy services firm Halliburton (NYSE:HAL).

Oil rebounds by almost 5% on Omicron hopes, Iran talks
 

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Comments (5)
New Jazenevd
New Jazenevd Dec 06, 2021 6:04PM ET
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Oil will be in shortage as long as Biden’s administration keeps power.
Laid Zipleen
Laid Zipleen Dec 06, 2021 10:40AM ET
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Omicron hopes ? BioNtech staff said today that actual vaccines won't be efficient against this variant ( 32 mutations ).
Andrew Ulferts
Andrew Ulferts Dec 06, 2021 10:40AM ET
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They aren’t effective against anything so far…. The optimism is due to the fact that it is not severe, it is highly contagious, therefore should take over as the dominant strain, and take away the “need” for the vaccines altogether. YW.
Keith Wilson
Keith Wilson Dec 06, 2021 12:05AM ET
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Lol.....Biden proven a joke once again. Release oil from reserves does nothing without strength behind the move. Saudi and the rest of the world knows Biden is a joke
Barani Krishnan
Barani Krishnan Dec 06, 2021 12:05AM ET
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Some were wetting their pants last week at the way the market was falling. Hindsight is a great thing isn't it? Headlines can turn the market on a dime and OPEC is in reactive market now, no longer as proactive in recent months. The next bearish Omicron headline could have a very different impact on oil. Learn to respect the volatility instead of putting on a faux laugh.
perplexed76 .
perplexed76 . Dec 05, 2021 11:18PM ET
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saudi feudal princes get angry
Bett Albern
Bett Albern Dec 05, 2021 8:27PM ET
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This is a crazy World we live in and we are seeing things that do not seem normal.  Remember when Khashoggi was murdered in Turkey and Biden called MBS, the leader of Saudi Arabia a murderous  thug.  Well, MBS does not like Biden and he will drive oil prices up and until Biden's approval ratings drop even lower to 30%.  I am waiting for Israel to take out Iran's Nuclear facilities.
Thomas Read
Thomas Read Dec 05, 2021 8:27PM ET
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Russia will invade Ukraine within 6 months
Johann de Jager
Wondering Dec 05, 2021 8:27PM ET
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Same for Taiwan.
Serguei Rus
Serguei Rus Dec 05, 2021 8:27PM ET
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Ukraine is Russia
 
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