Oil Prices Continue to Rise Thanks to Favorable Conditions

There is no lack of factors that have the ability to influence oil prices. Still, oil prices were on course for their biggest weekly gain since summer, with market sentiment buoyed by easing concerns regarding the new variant’s impact on global economic growth as well as fuel demand.

The Brent, as well as West Texas Intermediate (WTI) benchmarks, were both on track for gains of about 7% this week. 

Brent crude futures gained 0.2% or 11 cents to $74.54 a barrel by 09:27 GMT. On Thursday, Brent crude futures dropped 1.9%. 

U.S. WTI crude futures gained 27 cents or 0.4% to $71.21 after sliding 2% in a volatile session on Thursday.

Oil prices and important factors

Earlier in the week, the oil market recovered about half the losses it suffered due to the Omicron variant. Pfizer’s and BioNTech’s statement regarding the Omicron variant also helped to boost oil prices. A World Health Organization official stated that existing vaccines should still protect people who contract the Omicron variant from severe Covid cases. 

The situation in the world’s second-largest economy is a serious challenge for the oil industry. For example, the number of passengers who travel by plane fell in China due to Covid-19 restrictions. 

Meantime, ratings agency Fitch downgraded two real estate developers China Evergrande Group and Kaisa Group. Both of them defaulted on offshore bonds. That decision strengthened fears of a potential slowdown in the country’s property sector and the broader economy of China.

Several other factors also affected oil prices. A stronger U.S. dollar, rising ahead of U.S. inflation data due later on Friday, is one of them. Usually, oil declines when the dollar firms because it makes oil more expensive for buyers holding other currencies.