By Stephanie Kelly NEW YORK (Reuters) -Oil prices climbed by nearly $3 on Monday on hopes the Omicron coronavirus variant would have a less damaging economic impact if its symptoms proved mostly mild and as the prospect of an imminent rise in Iranian oil exports receded. Reports in South Africa said Omicron cases there had […]
Oil rebounds towards $72 on Omicron hopes and Iran talks
By Stephanie Kelly
NEW YORK (Reuters) -Oil prices climbed by nearly $3 on Monday on hopes the Omicron coronavirus variant would have a less damaging economic impact if its symptoms proved mostly mild and as the prospect of an imminent rise in Iranian oil exports receded.
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 the possibility of pulling back travel bans for southern Africa was being discussed.
Brent crude rose $2.93, or 4.2%, to $72.81 a barrel, by 1:45 p.m. EST (1845 GMT). U.S. West Texas Intermediate crude rose $2.98, or 4.5%, to $69.24 a barrel.
Last week, both benchmarks fell for a sixth week in a row.
“If Omicron is proven over the coming days – or weeks – to be less aggressive, even if it is more contagious, then we can say 100% last week’s lows were the bargain of the quarter,” said Jeffrey Halley, an analyst at brokerage OANDA.
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.
“Traders are brushing off the initial panic over the Omicron variant,” said Louise Dickson of Rystad Energy. “The oil market seems to now be convinced that higher price levels are warranted.”
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.
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.
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.
(Reporting by Stephanie Kelly; Additional reporting by Alex Lawler and Florence TanEditing by Edmund Blair, David Goodman and David Gregorio)