SINGAPORE: Oil prices rose on Tuesday, although investors remain concerned about the rapid spread of the Omicron coronavirus variant around the world, prompting countries to consider more restrictions that could reduce demand for fuel.
Brent crude futures were up 59 cents, or 0.8%, to $ 72.11 a barrel at 4:18 a.m. GMT, while US West Texas Intermediate (WTI) crude futures were up 73 cents, or 1.1%, to $ 69.34 a barrel.
“After a few tough days, crude prices are rebounding as much of the COVID wall of concern has been built in,” said Edward Moya, senior analyst at OANDA.
“The short-term blow to economic growth from the border closure is still unknown and oil prices will remain sensitive to any stricter travel requirements.”
New Zealand delayed the planned reopening of its international border due to the massive spread of Omicron around the world on Tuesday, as several other countries reimposed social distancing measures.
Many countries are on high alert days before the Christmas and New Year celebrations, with Omicron infections increasing rapidly in Europe, the United States and Asia, including Japan where only one group in a base military has risen to at least 180 cases.
Yet Moderna Inc said on Monday that a booster dose of its COVID-19 vaccine appeared to protect against the rapidly spreading Omicron variant in lab tests, offering investors some hope.
On the supply front, OPEC + compliance with oil production cuts fell to 117% in November from 116% a month earlier, two sources in the group told Reuters, indicating that levels of production remain well below agreed targets.
In the United States, crude oil inventories are expected to decline for the fourth week in a row, while distillate and gasoline inventories likely rose last week, according to a preliminary Reuters poll on Monday.
The poll was conducted ahead of reports from the American Petroleum Institute, an industry group, due Tuesday, and the EIA, the statistical arm of the US Department of Energy, due Wednesday.