Oil prices increased on Wednesday as uncertainties about omicron variant's effects on demand outlook in 2022 ease while supply outages also help the upward movements of the prices.
International benchmark Brent crude was trading at $78.88 per barrel at 0627 GMT for a 0.26% increase after closing the previous session at $78.67 a barrel.
American benchmark West Texas Intermediate (WTI) was at $76.10 per barrel at the same time for a 0.15% gain after trade ended at $75.98 a barrel in the previous session.
Both contracts reached their highest levels in almost a month of trading as omicron impact on oil prices began to ease after milder symptoms of the variant increased the euphoria about a better demand outlook next year.
Cementing positive demand sentiments, the UK said it would not impose new COVID-19 restrictions before 2022.
Meanwhile, US President Joe Biden promised to address a COVID-19 test shortage as the Omicron variant threatens to overload hospitals and disrupt travel plans.
Thousands of flights have been cancelled in the US since last week due to Omicron-induced staff shortages.
Supply disruptions in Ecuador, Libya and Nigeria also provide support on prices.
Ecuador's state-owned pipeline SOTE has ruptured due to erosion in the Amazon region.
In Libya, country's National Oil Company (NOC) said more than 300,000 bpd of crude production is shut in at fields in the western part of the country by the Petroleum Facilities Guard (PFG), a paramilitary unit tasked with protecting NOC's assets and facilities.
In Nigeria, Royal Dutch Shell declared 'force majeure' on Nigerian Forcados crude oil deliveries after a faulty barge obstructing tanker traffic last week.
Investors are also monitoring the upcoming meeting of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on Jan. 4. The group will decide whether to increase output by 400,000 barrels per day (bpd) in February.
The OPEC+ producers in their previous meeting agreed to stick to the scheduled output scheme ignoring requests from some countries including the US to raise the production.
- Fall in US inventories help upward price movements
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 3.1 million barrels in US gasoline inventories, less than the market expectation of a rise of 3.2 million barrels.
The forecast of such a large inventory draw signals a recovery in crude demand in the US, easing investor concerns over dwindling demand, which, in turn, supports higher prices.
By Sibel Morrow