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Oil Rebounds on OPEC, Only to Drop Back on 1st US Omicron Case

CommoditiesDec 01, 2021 03:20PM ET
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© Reuters.

By Barani Krishnan

Investing.com - Oil prices recovered from 3-month lows on Wednesday in anticipation of supportive action from OPEC, before closing lower for a fifth time in six days after the United States announced its first Omicron case of Covid.

WTI, or the West Texas Intermediate benchmark for U.S. crude settled down 61 cents, or almost 1%, at $65.57 per barrel, after rebounding to $69.49 earlier in the session. WTI has lost almost 17% since its last positive close of $78.50 on Nov. 23. It is also down more than 23% from the seven-year high of $85.41 notched in mid-October.

London-traded Brent crude, the global benchmark for oil, settled down 36 cents, or 0.5%, at $68.87. Brent has lost 16% since its last positive close of $82.31 a week ago. It is also down 21% from its seven-year high of $86.70 attained in mid-October.

“I think the next immediate landing zone for WTI is $62,” said John Kilduff, founding partner at New York energy hedge fund Again Capital. “There’re still lots of moving parts to this Omicron thing, but I imagine that will be the first target for WTI before we try to take out $60.”

The US individual infected with the latest-discovered variant of Covid is a California resident who had traveled home from South Africa on Nov. 22, top U.S. virologist Dr. Anthony Fauci told a news conference. The person was fully vaccinated, has mild symptoms and is self-quarantining.

The news dragged down crude prices, already weighed by unsupportive weekly supply-demand inventory data released by the Energy Information Administration.

The 13-member OPEC, or Organization of the Petroleum Exporting Countries, led by Saudi Arabia met on Wednesday before a larger summit due on Thursday with 10 other oil producers steered by Russia. 

OPEC did not divulge any production plans on Wednesday, meaning that it could be up to the 23-nation OPEC+ alliance to decide how producers react to what could be the second biggest crisis in oil demand since the onset of the first Covid outbreak 20 months ago.

Ahead of its Thursday meeting, OPEC+ had prepared a document that showed the alliance forecasting the global oil surplus to grow to 2 million barrels per day in January, 3.4 million in February and 3.8 million in March, Reuters reported.

Crude prices also struggled to hold to the highs of the day after weekly inventory data showed crude inventories dropped by just 910,000 barrels last week, versus analysts' expectations for a draw of 1.237 million barrels.

Distillate stockpiles, which include diesel and heating oil, rose 2.16 million barrels in the week against expectations for a build of 462,000 barrels.

Oil Rebounds on OPEC, Only to Drop Back on 1st US Omicron Case
 

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Comments (4)
Robert Francis
Robert Francis Dec 01, 2021 11:51AM ET
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an energy secretary without knowledge of the industry and who wants to bankrupt the industry
ben sc
ben sc Dec 01, 2021 11:42AM ET
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But the energy secretary has no idea how many barrels a day the economy uses.....
diogenis karslievidis
diogenis karslievidis Dec 01, 2021 11:42AM ET
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I am Diogenis Karslievidis may moter for Mobil and Trakter give economy 50-60persent, this texnologi give for big energian Meshins.I don't now good spin English,to day may baby don't he's Ize. This problem can Evrei Fessalonikis.I am Christian Evropeos URUM is Ellinn and I heve big problem Camera don't gov me work in may Haouze. Very day Problem withe Piople-ZOO.I don't see Evropi in may cityAsia van big PROBLEM.Who is may Gold and diamond and may many I don't now,now csntry now demokratia now piople21eona We are little nation in aouar planet and won't gpmosapies,nowZOO.
sagar khade
sagar khade Dec 01, 2021 11:11AM ET
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nice ❤️
Me comment
Me comment Dec 01, 2021 10:43AM ET
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big deal he increase in the gasoline and distillates accounted for much more oil inventory fall so means demand was way down.
Shane Weddle
Shane Weddle Dec 01, 2021 10:43AM ET
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Well its winter so….
Clay Douglass
Clay Douglass Dec 01, 2021 10:43AM ET
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speak English but wipe
John Eisenbeiser
John Eisenbeiser Dec 01, 2021 10:43AM ET
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Imports?SPR release ?
 
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