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U.S. crude-oil futures on Tuesday gained for a second day, pushing the commodity toward the highest value in about two weeks, as fears eased that the coronavirus omicron variant may reduce demand over the winter, while China moved to ease monetary policy this week.
West Texas Intermediate crude for January delivery
CLF22,
CL00,
picked up $2.27, or 3.27, to reach $71.76 a barrel on the New York Mercantile Exchange, following a 4.9% advance on Monday. If WTI, the U.S. benchmark, settled at the current level it would mark its highest value since Nov. 24, a day before omicron variant’s emergence prompted a sharp drop in stocks and commodity prices.
February Brent crude
BRNG22,
BRN00,
the global benchmark, was trading $1.83, or 2.5%, higher at $74.96 a barrel on ICE Futures Europe, and heading for a fourth straight gain, after climbing 4.6% a day ago, with the contract also headed for the highest finish since Nov. 24, if values hold through settlement.
Gains for crude have been aided by a confluence of factors, including stalled nuclear disarmament talks between Iran and other Western countries, reducing the chance of Iranian crude returning to the market, while fears about the omicron variant also subsided.
In addition, China’s imports increased 31.7% on year in November, while its exports gained 22%. Data showed that imports of oil from the world’s largest crude importer rose 14.3% to 10.17 million barrels per day in November, up from 8.9 million bpd in the month before, although still below the 11.04 million bpd from the same period last year.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, last Thursday, have displayed some confidence in the prospects for crude demand, agreeing to rollover a current production policy and raise monthly overall output by 400,000 barrels per day in January, while deciding not to adjourn a meeting to allow for further shifts in policy if needed.
Commodity strategists also pointed to Saudi Arabia’s decision over the weekend to increase prices of Arab Light oil for January delivery that it sells to Asia and U.S. as another bullish factor for oil’s gains.
