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Oil futures edged higher Monday, beginning 2022 on a positive note as traders looked past rising COVID-19 cases, building on the strongest annual rise for crude in 12 years.
West Texas Intermediate crude for February delivery
CL00,
CLG22,
rose 29 cents, or 0.4%, to $75.50 a barrel on the New York Mercantile Exchange. March Brent crude
BRN00,
BRNH22,
the global benchmark, was up 43 cents, or 0.6%, at $78.21 a barrel on ICE Futures Europe. WTI, the U.S. benchmark, rose 55% in 2021, the strongest percentage gain based on front-month contracts since 2009. Brent advanced 50.2% — its strongest percentage rise since 2016.
“The omicron variant is spreading like wildfire but hospitalizations remain under control and most governments seem wary of going back to lockdowns, feeding optimism that this wave won’t inflict much damage on the global economy,” said Marios Hadjikyriacos, senior analyst at XM, in a note.
“This cautious sense of relief is being reflected across financial markets today. Crude oil prices are on the rise, European equities are a sea of green, while the defensive Japanese yen is on the ropes. That said, all these moves are relatively minor as traders await the next big theme,” Hadjikyriacos said.
Over the past week, the average number of new U.S. cases has topped 400,000 for the first time, up more than 200% over the last 14 days, according to a New York Times tracker. Deaths have fallen by 3% over the same period. Dr. Anthony Fauci, the government’s top infectious disease doctor, said Sunday that the focus should be on the number of hospitalizations, which could overwhelm health systems, rather than new infections.
Many infections are mild or asymptomatic and scientists believe the omicron variant, while more infectious, may be less virulent than other variants. But other variants are also circulating. Moreover, the risk of severe disease from any circulating variant, including omicron is much, much higher for the unvaccinated, Fauci warned last week.
