Oil extends rally on supply tightness, Brent at more than 3-year high

Oil gains as Omicron fears ease

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According to Reuters, although some governments have stepped up containment measures to prevent its rapid spread, oil prices expanded on Thursday due to market confidence that the Omicron coronavirus variant will not weaken global economic growth.

At 0201 GMT, US West Texas Intermediate (WTI) crude oil futures rose 28 cents, or 0.4%, to US$72.64 per barrel, up 0.4% on the previous trading day.

Brent crude oil futures rose 22 cents, or 0.3%, to US$76.04 per barrel, after gaining 0.5% on Wednesday.

The comments of BioNTech and Pfizer boosted the market, that is, the three-shot course of their COVID-19 vaccine can prevent Omicron variant infection.

Commonwealth Bank Commodity Analyst Vivek Dhar said in a report: “Early signs of the Omicron variant… show that, given that the hospitalization rate has not soared, it may not be as severe as initially feared.”

“The third dose of the vaccine also shows promising signs of protection against the new variants,” he said.

However, due to the re-implementation of restrictions by governments to limit the spread of Omicron, including people working from home again in the United Kingdom, the closure of restaurants, bars and schools in Denmark, and the suspension of group travel from Guangdong in China, the market growth has been suppressed.

“Demand risk has not been fully abated,” ANZ analysts said in a report.

From November 25 to December 1, the outbreak of Omicron caused the price of Brent crude oil to plummet by 16%. This week’s decline has exceeded half, but analysts said that further recovery may be limited until the impact of Omicron becomes more pronounced.

OANDA analyst Craig Erlam said that Brent crude oil may face resistance near the lower limit of the 76.50-77.50 range, which is the key support level at the end of September and the end of November.

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