Author: Barani Krishnan
Investing.com – Crude oil prices rose on Monday, extending last week’s growth in the final stimulus for 2021 on travel bets next year despite constant threats to oil consumption from Covid variants.
But lower-than-usual trading volume – due to the large number of market participants on holiday – meant price movements could remain volatile for the last four days of the year.
Sudden rises in headlines about Covid could also ease the mood.
In trading hours in Asia on Monday, the benchmark value of U.S. crude oil West Texas Intermediate, or WTI, fell 0.5%, reacting to in the United States during the Christmas holidays due to bad weather and new Covid infections through the Omicron variant.
The U.S. Centers for Disease Control and Prevention also said Monday it is investigating reports of Covid’s cases on board.
“Smaller travel equals lower economic activity in the U.S. equals lower value of WTI, the U.S. oil measure,” noted Jeffrey Halley, an analyst for the OANDA online trading platform in Sydney.
“Yet the momentum has been dampened and I doubt any story will have a lasting impact on oil prices,” Halley added. “The story of the global recovery for 2022 is still on the right track. Disruption of goods and services due to the isolation of workers, especially air transport, seems to be the main consequences so far. It will probably only cause short-term nerves. ”
By 13:30 ET (18:30 GMT) it was up $ 1.91, or 2.6%, to $ 75.70 a barrel, after hitting a session low of $ 72.58. Last week, the benchmark value of U.S. crude oil rose 4%. From the year to date, WTI shows an increase of 56%.
London-based trading, the global benchmark for oil, rose $ 2.57 that day, or 3.4 percent to $ 78.36 a barrel. Brent also rose about 4 percent last week and 51 percent up for the year.
Those long crude oils also bet on the positive market intervention of oil producers OPEC +, which were to hold their monthly meeting next week.
At its last meeting earlier this month, OPEC + stuck to its plans to increase production to 400,000 barrels a day from January despite an increase in Omicron cases.
Omicron was first discovered in November and now accounts for nearly three-quarters of cases in the U.S. and as many as 90% in some areas, such as the East Coast. The average number of new coronavirus cases in the U.S. rose 45 percent to 179,000 a day last week, according to Reuters.
Although research suggests that Omicron is less deadly than the original Covid-19 strain that erupted in March 2020 – as well as the Delta variant that became popular earlier this year – few take the risk after they or those they have been in contact with infected.
But many people are also defying calls for caution or taking calculated risks as vaccines and boosters against the virus remain available, and new treatments – such as the world’s first COVID pill since Pfizer (NYSE 🙂 – get approval per day.
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