Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Copper Tip Energy Services
Hazloc Heaters
Hazloc Heaters
Copper Tip Energy


Oil Powers Into the New Year as Traders Shrug Off Omicron Impact


English Español 简体中文 हिन्दी Português
These translations are done via Google Translate
(Bloomberg) Oil headed for a fourth straight weekly gain, the longest winning streak since October, on signs that the market is tightening as global consumption withstands the impact of the omicron virus variant.Brent crude pared earlier gains on Friday, but is still on track for a 4% increase this week. The global oil benchmark has made a strong start to the year, which has been underscored by lower U.S. inventories.

Brent heading for a fourth weekly gain

Crude has now clawed back most of its losses late last year that were driven by omicron and the White House-led releases from national oil reserves. Although it has proved to be fast-spreading, the variant also appears to be milder, particularly in vaccinated people, lessening the impact on energy consumption. Major user India is poised to weather the latest scare. The International Energy Agency said earlier this week that global oil demand has turned out to be stronger than expected.

Oil prices are finding support from physical markets — where real barrels are bought and sold — as supplies change hands at healthy premiums. There’s also global strength in the diesel sector. With prices climbing higher, traders are watching whether the Organization of Petroleum Exporting Countries and its allies will be able to deliver their planned monthly production increases in output in full.

“The price slide that was triggered by the emergence of the omicron variant has been reversed completely,” said Carsten Fritsch, an analyst at Commerzbank AG. “Omicron’s impact on oil demand has been considerably milder so far than initially feared.”

GLJ
Sky Eye Measurement
GLJ
Sky Eye Measurement
Prices
  • Brent for March settlement rose 0.2% to $84.61 a barrel by 8:24 a.m. in New York
  • WTI for February delivery fell 0.1% to $82.02 a barrel

Optimism about the demand outlook is reflected in the market’s bullish backwardated pricing structure, with near-term futures above those further out. The spread between West Texas Intermediate’s two nearest contracts is now well above $6 a barrel, up from less than $3 in early December.

Despite the broadly positive mood, there are notes of caution. China has maintained its strict approach to the virus, while India and some other Asian countries have introduced partial curbs which has caused a drop in mobility. On Monday, China is likely to confirm its weakest economic growth in more than a year, after reporting a drop in annual crude imports on Friday.

Related coverage:
  • The world’s physical oil market is running hot, offering a boost to bulls.
  • Asian refinery margins for low-sulfur diesel surged to a four-month high as regional inventories sank to the lowest since 2013.
  • The oil market will move into a surplus after temporary seasonal factors subside, according to Citigroup Inc.



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE