Omicron blockade concerns eased, oil prices soared by 5%, the biggest increase in three and a half months
Valeria Bednarik 2021-12-07 07:00:09
On Monday (December 6), the oil distribution surged 5.42% in late trading to close at $73.67 per barrel. Preliminary data from South Africa, the epicenter of the Omicron epidemic, shows that the hospitalization rate has not seen a surge. The market believes that it will be less destructive, alleviating concerns about the epidemic prevention blockade, and giving oil prices upward momentum.
South Africa reports that so far, local Omicron infections have only mild symptoms. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases of the United States, told CNN that “it does not appear to be serious”. At the same time, he also warned that it is too early to draw conclusions. The White House said on Monday that President Biden’s public health advisers are reconsidering every day the issue of barring foreign citizens visiting from eight southern African countries.
Ed Moya, senior market analyst at Oanda Corp., said that Wall Street seems to be optimistic about predicting the growth prospects, because omicron's symptoms do not appear to be as severe as delta. Phil Flynn, a senior analyst at Price Futures Group, said that all the news today is positive and momentum seems to be picking up.
Biden’s government’s efforts to lower energy prices took a step forward on Monday, with the first tender for the release of 32 million barrels of strategic oil reserves closed. When the US Department of Energy first announced the release of a total of 50 million barrels of strategic oil reserves last month, it said that the first batch of bids for the release will be closed at 10 am Central Time on Monday. Although the winning bid will not be announced until December 14, according to people familiar with the matter, at least two international refiners have expressed interest. This is part of the Biden administration's action to cut oil prices. The US government will announce another 18 million barrels of tender later this month.
According to the Iraqi National News Agency INA, Iraqi Oil Minister Ihsan Abdul-Jabbar said that oil prices are expected to recover and will exceed US$75 per barrel in the next few months. Due to international variables and the new crown epidemic, it is difficult for OPEC to determine an oil price target. Iraq cannot tolerate a sharp drop in oil prices, and the country is cooperating with OPEC to stabilize oil prices. OPEC is actively controlling the oil market. Iraq currently exports 3.7 million barrels of oil a day. The country's interests depend on OPEC's balancing decision.
Saudi Arabia on Sunday raised the official price of all grades of crude oil in Asia and the United States in January, up to $0.80 from the previous month. According to a statement from Saudi Aramco, the price of all crude oil grades exported to Asia and the United States will be increased in January. For Asian buyers, the price of the most core Arabian light crude oil will increase by 60 cents, a premium of 3.3 US dollars from the Dubai/Oman benchmark price after adjustment; the premium for the same product in November and December this year was 1.3 US dollars and 2.7 US dollars, respectively. For American buyers, Saudi Aramco continued to raise the price of light crude oil for January by 40 cents, a premium of US$2.15 over the American Sour Crude Oil Index (ASCI).
Saudi Aramco’s increase in prices is consistent with the expectations of Asian traders and refiners surveyed by foreign media, indicating that the oil giant’s management remains optimistic. Amin Nasser, CEO of Saudi Aramco, also stated in an earlier interview that he was personally "very optimistic about demand" and that the market's reaction to Omicron was a bit overdone.
The United States said over the weekend that the possibility of Iran rejoining the nuclear agreement may be declining. This is one of the most pessimistic assessments of the prospects of the negotiations by the United States so far, dispelling expectations that Iranian oil will return to the market immediately. The prospect of increased Iranian oil exports has faded, which has also boosted oil prices. Ed Moya, senior market analyst at Oanda Corp., said that Wall Street seems to be optimistic about predicting the growth prospects, because omicron's symptoms do not appear to be as severe as delta.
(U.S. Oil Hour Chart)
South Africa reports that so far, local Omicron infections have only mild symptoms. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases of the United States, told CNN that “it does not appear to be serious”. At the same time, he also warned that it is too early to draw conclusions. The White House said on Monday that President Biden’s public health advisers are reconsidering every day the issue of barring foreign citizens visiting from eight southern African countries.
Ed Moya, senior market analyst at Oanda Corp., said that Wall Street seems to be optimistic about predicting the growth prospects, because omicron's symptoms do not appear to be as severe as delta. Phil Flynn, a senior analyst at Price Futures Group, said that all the news today is positive and momentum seems to be picking up.
Biden’s government’s efforts to lower energy prices took a step forward on Monday, with the first tender for the release of 32 million barrels of strategic oil reserves closed. When the US Department of Energy first announced the release of a total of 50 million barrels of strategic oil reserves last month, it said that the first batch of bids for the release will be closed at 10 am Central Time on Monday. Although the winning bid will not be announced until December 14, according to people familiar with the matter, at least two international refiners have expressed interest. This is part of the Biden administration's action to cut oil prices. The US government will announce another 18 million barrels of tender later this month.
According to the Iraqi National News Agency INA, Iraqi Oil Minister Ihsan Abdul-Jabbar said that oil prices are expected to recover and will exceed US$75 per barrel in the next few months. Due to international variables and the new crown epidemic, it is difficult for OPEC to determine an oil price target. Iraq cannot tolerate a sharp drop in oil prices, and the country is cooperating with OPEC to stabilize oil prices. OPEC is actively controlling the oil market. Iraq currently exports 3.7 million barrels of oil a day. The country's interests depend on OPEC's balancing decision.
Saudi Arabia on Sunday raised the official price of all grades of crude oil in Asia and the United States in January, up to $0.80 from the previous month. According to a statement from Saudi Aramco, the price of all crude oil grades exported to Asia and the United States will be increased in January. For Asian buyers, the price of the most core Arabian light crude oil will increase by 60 cents, a premium of 3.3 US dollars from the Dubai/Oman benchmark price after adjustment; the premium for the same product in November and December this year was 1.3 US dollars and 2.7 US dollars, respectively. For American buyers, Saudi Aramco continued to raise the price of light crude oil for January by 40 cents, a premium of US$2.15 over the American Sour Crude Oil Index (ASCI).
Saudi Aramco’s increase in prices is consistent with the expectations of Asian traders and refiners surveyed by foreign media, indicating that the oil giant’s management remains optimistic. Amin Nasser, CEO of Saudi Aramco, also stated in an earlier interview that he was personally "very optimistic about demand" and that the market's reaction to Omicron was a bit overdone.
The United States said over the weekend that the possibility of Iran rejoining the nuclear agreement may be declining. This is one of the most pessimistic assessments of the prospects of the negotiations by the United States so far, dispelling expectations that Iranian oil will return to the market immediately. The prospect of increased Iranian oil exports has faded, which has also boosted oil prices. Ed Moya, senior market analyst at Oanda Corp., said that Wall Street seems to be optimistic about predicting the growth prospects, because omicron's symptoms do not appear to be as severe as delta.
(U.S. Oil Hour Chart)