Oil expands profits as Omicron fears Iran is lagging behind are mitigated


Crude oil storage tanks are seen in an aerial photo at the Cushing Oil Hub in Cushing, Oklahoma, the United States, April 21, 2020. REUTERS / Drone Base / File Photo

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  • Global Oil CEOs Emphasize Fossil Fuel Needs
  • Germany calls on Iran to make realistic proposals for nuclear talks

SINGAPORE, Dec. 7 (Reuters) – Oil prices rose Tuesday after recovering nearly 5% the previous day as concerns about the Omicron variant’s impact on global fuel demand subsided as nuclear talks with Iran hit roadblocks and the return of Iranian crude oil delayed deliveries.

Brent crude oil futures rose 34 cents, or 0.5%, to $ 73.42 a barrel around 0124 GMT after leveling 4.6% higher on Monday. US West Texas Intermediate Crude Oil was at $ 69.92 a barrel, up 43 cents, or 0.6%, building on a 4.9% increase in the previous session.

Oil prices were hit last week on concerns that vaccines against the new variant of the coronavirus, Omicron, might be less effective, raising fears that governments might reintroduce restrictions to curb its spread and dampen global growth and oil demand.

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However, a South African health official reported over the weekend that Omicron cases had shown only mild symptoms there. Leading US infectious disease official Anthony Fauci also told CNN that “it doesn’t look like it has any major severity yet.” Continue reading

“This reduces the likelihood of the worst-case scenario that the oil markets have priced in over the past few weeks,” ANZ analysts said in a press release.

As another sign of confidence in oil demand, the world’s largest exporter, Saudi Arabia, raised monthly crude oil prices on Sunday. It did so after the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC +, agreed in January to continue to grow production by 400,000 barrels a day despite the release of strategic US oil reserves. Continue reading

A delay in the return of Iranian oil also supported prices. Indirect nuclear talks between the US and Iran have encountered roadblocks. Germany called on Iran on Monday to come up with realistic proposals in the talks about its nuclear program. Continue reading

“While negotiations could still be successful on resumption this week, markets may have to consider a longer delay in Iranian oil exports,” said Vivek Dhar, commodities analyst for the Commonwealth Bank of Australia.

“That is positive for the price of oil and supports OPEC + ‘s plans to boost oil production by 2022.”

Meanwhile, Iraq has also been optimistic about demand and higher prices, while global oil and gas managers have warned of underinvestment and the need for fossil fuels despite the pursuit of cleaner energy. Continue reading

“The big oil sell-off appears to be over as the mid-1960s offered strong support and a constant reminder that the oil market will remain vulnerable to some deficits for the next few years,” OANDA analyst Edward Moya said in a note.

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Reporting by Florence Tan; Arrangement by Christopher Cushing

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