Oil prices rebound thanks to recovery in risk sentiment. The Omicron variant is reportedly harmless, so it is unlikely to have a major impact on the global economy.
Crude oil prices rose more than 5 percent in yesterday's trading, supported by recovering market sentiment on positive news regarding the impact of the Omicron variant. At the time of writing, Brent oil was slightly corrected at around $74.13 per barrel, while WTI (West Texas Intermediate) tends to continue rising from its current level of $70.40 per barrel.
A recent report from the South African authorities said that people with COVID Omicron had only mild symptoms. This confirms the statement of the top US health official, Anthony Fauci, who said he had not found any reports of severe symptoms of infection with the Omicron variant in the US.
The White House said it would review flight bans from eight African countries including South Africa in the near future. This step was taken in connection with the easing of concerns about the impact of Omicron's COVID.
"All the headlines are currently bullish and the oil price momentum seems to be picking up again," said Phil Flynn, senior analyst at Price Futures Group. If the upward momentum in oil prices at the beginning of the week can hold, then a weekly path of strengthening will be formed after a bearish movement for 4 consecutive weeks.
Oil Bullish Supported by These 2 Factors
In addition to news related to the impact of Omicron, the increase in oil prices in yesterday's session was inseparable from Saudi Arabia's decision to raise the selling price for January 2022 oil shipments to Asia and America. In addition, Iraq's Oil Minister, Ihsan Abdul Jabbar, estimates oil prices will reach more than $75 per barrel in the near future.
The stagnation of developments in the US-Iran negotiations regarding the nuclear agreement also supports the current outlook for an increase in oil. If the nuclear deal fails, the prospects for an increase in Iran's oil exports will shrink. It should be noted that Iran has been subject to sanctions against selling oil abroad by the US and its allies. This was done to pressure Iran to comply with the 2015 nuclear agreement.
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