Economy

Oil rises as investors see low risk of new COVID-19 variant

Upward price boosters include Saudi Arabia's decision to raise crude prices to Asian and US customers, and impasse in US-Iran talks

Sibel Morrow   | 07.12.2021
Oil rises as investors see low risk of new COVID-19 variant

ANKARA

Oil prices climbed on Tuesday over relief that the omicron variant shows only mild symptoms, which would either scale back or eliminate new restrictions and with the bottleneck in US-Iran talks that is deferring the return of Iranian oil to the market.

International benchmark Brent crude was trading at $73.91 per barrel at 0656 GMT for a 1.13% increase after closing the previous session at $73.08 a barrel.

American benchmark West Texas Intermediate (WTI) was at $70.53 per barrel at the same time for a 1.49% gain after trade ended at $69.49 a barrel in the previous session.

Oil prices rebounded from a two-week downward trajectory instigated by reports of the new COVID-19 variant omicron.

Reports from South Africa, where the new variant originated, suggest that omicron cases in the region only show mild symptoms.

US President Joe Biden's chief medical advisor Anthony Fauci said that "it doesn't look like there's a great degree of severity to it", which helped boost market confidence that restrictions already put in place would be short-lived and eliminating the need for renewed restrictions.

Meanwhile, the World Health Organization (WHO) Director-General Tedros Adhanom on Sunday slammed countries that have imposed travel restrictions on travelers from southern Africa due to the emergence of the omicron variant of COVID-19.

The low probability of a prompt conclusion to the US-Iran nuclear talks, which resumed in Vienna last week, also supported the upward price trend.

Talks between Iran and six other powers were halted in June since the election of Iran's new hardline president and only resumed on Nov. 29.

After the Saudi state oil giant Saudi Aramco announced its intention on Sunday to lower the price of Arab Light crude for its Asian and US customers by $0.80 in January, prices rose buoyed by market confidence of greater demand expectations.

The Saudi price cut came after the decision of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to raise production by 400,000 barrels per day in January.

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