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Dow Futures Down 320 Pts; Economic Slowdown Fears Weigh

Oil prices rise to highest level in a month as Omicron concern eases

CommoditiesDec 27, 2021 03:05PM ET
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© Reuters. FILE PHOTO: Petroleum pump jacks are pictured in the Kern River oil field in Bakersfield, California November 9, 2014. REUTERS/Jonathan Alcorn

By Stephanie Kelly

NEW YORK (Reuters) - Oil prices rose more than 2% on Monday to the highest level since late November on hopes that the Omicron coronavirus variant will have a limited impact on global demand in 2022, even as surging cases caused flight cancellations.

Global benchmark Brent crude rose $2.46, or 3.2%, to settle at $78.60 a barrel. U.S. West Texas Intermediate (WTI) crude rose $1.78, or 2.4%, to settle at $75.57 a barrel. The U.S. market was closed on Friday for a holiday.

Both benchmarks rose on Monday to the highest since Nov. 26. On that day, oil plunged by more than 10% when reports of a new variant first appeared. The benchmarks gained last week after early data suggested that Omicron could cause a milder level of illness.

"Though Omicron is spreading faster than any COVID-19 variant yet, a relatively relieving news is that most people infected with Omicron are showing mild symptoms, at least so far," said Leona Liu, analyst at Singapore-based DailyFX.

Britain's government will not introduce new COVID-19 restrictions for England before the end of 2021, its health minister, Sajid Javid, said on Monday.

More than 1,300 flights were cancelled by U.S. airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops.

"The disruption to goods and services from isolating workers, notably air travel, seems to be the main fallout so far," Jeffrey Halley, analyst at brokerage OANDA, said of rising Omicron cases. "That is only likely to cause short-term nerves, with the global recovery story for 2022 still on track."

Oil prices have risen over 50% this year, supported by recovering demand and supply cuts by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+.

Talks resume on Monday between world powers and Iran on reviving Tehran's 2015 nuclear deal. Iran said oil exports were the focus of the talks, which so far appear to have made little progress on boosting Iran's shipments.

Also on investors' radar is the next OPEC+ meeting on Jan. 4, at which the producer alliance will decide whether to go ahead with a planned 400,000 barrels-per-day (bpd) production increase in February.

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

Oil prices rise to highest level in a month as Omicron concern eases
 

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Comments (12)
Ronaldo Bhai
Ronaldo Bhai Dec 27, 2021 8:18PM ET
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super
Jamie An
Jamie An Dec 27, 2021 3:29PM ET
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Putin should show his capable and willing for defense mother Russia by any kind of military action. Otherwise US or EU never believe it.
Penny Trader
Penny Trader Dec 27, 2021 3:16PM ET
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morning omicron peaked.evening omicron eased.don't believe in news
Mate Tenpro
Mate Tenpro Dec 27, 2021 2:35PM ET
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Based on headlines and not on facts!
Mark Bitarabeho
Mark Bitarabeho Dec 27, 2021 2:06PM ET
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Clearly you are not traders but rather deniers.
Michael Angelo
Michael Angelo Dec 27, 2021 1:32PM ET
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Omicron is bad but is good, flight cancels but is good, inflation is here but is good... etc, easy to write an article. Don't need AI just write whatever, the liquidity oceans, media monopoly and manipulation will do the rest. Just pray and play.
Luca Vascas
Luca Vascas Dec 27, 2021 12:28PM ET
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joke article...all manipulation
Ham Tum
Ham Tum Dec 27, 2021 11:27AM ET
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COVID doesn't exists all fake news
Richard Ash
Richard Ash Dec 27, 2021 11:27AM ET
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How long have you even stupid
Raju Basnet
Raju Basnet Dec 27, 2021 11:26AM ET
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All fake
Historical Movies
Historical Movies Dec 27, 2021 9:25AM ET
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Don't Trade with news all fake articles
 
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