Oil rises as the market's fears over Omicron begin to ebb

Brent crude up to almost $70 a barrel as Opec+ continues to gradually boost output

Crude oil prices rose today, giving up their earlier losses, as Opec+ stuck to its policy of incrementally boosting output, and as market considered whether the Omicron coronavirus variant may not be as bad as feared.

Brent crude rose by over $1 to just under $70 a barrel. The Organization of the Petroleum Exporting Countries and its allies, together known as Opec+, decided to release more oil into the market in January in line with previous months.

"They thought it might do more damage than good, to pause on production increases and that it might send a signal to the market that the demand destruction priced in was real," said Phil Flynn, senior analyst at Price Futures Group.

I think the Opec decision is sending a signal of confidence that they believe the price action recently has been overdone. 

Since August, the group has been adding an additional 400,000 barrels per day of output to global supply each month, gradually winding down record cuts agreed in 2020.

Global oil prices have lost more than $10 a barrel since last Thursday, when news of the Omicron variant first shook investors. Oil and gas prices are being closely watched amid global inflation pressures.  

• Reuters 

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