Oil prices jumped on Tuesday, supported by tight supply as well as hopes that rising coronavirus cases and the spread of the Omicron variant will not affect a global demand recovery.
OPEC supply additions are running below their allowed increase as part of a pact with allies as some countries are struggling to increase output. Major economies avoided a return to severe lockdowns, even as coronavirus continues to spread in many countries.
Covid’s new variant is the dominant strain in Brazil, according to the country’s Health Minister Marcelo Queiroga. He said the government did not expect to see high hospitalization and deaths rates, citing its strong vaccination program.
Russia’s capital Moscow is ready to mobilize to tackle a “very intense” rise in Omicron cases. The World Health Organization warned against treating Covid as an endemic illness like flu, rather than a pandemic. The Omicron variant continues to spread globally.
Brent crude added $1.14 or 1.4% to $82.01 a barrel at 11:34 GMT. It dropped 1% in the previous session. U.S. West Texas Intermediate (WTI) gained $1.16 or 1.5% to $79.39. On Monday, WTI fell 0.1%.
Oil prices and producers
In 2021, Brent gained 50% and rallied further in 2022 as investors see demand rising while OPEC and its allies slowly ease record output cuts made in 2020.
Outages in Libya also helped to boost oil prices. The production increased, but another problem appeared on the horizon. On Tuesday, National Oil Corp said it was suspending exports from Es Sider terminal.
A weaker U.S. currency also helped support oil as it makes oil cheaper for those holding other currencies and tends to reflect a higher investor risk appetite.
Analysts and investors are waiting for the American Petroleum Institute’s (API) report. The API’s report is due at 21:30 GMT.