At the two-month high, crude futures closed the session on Wednesday, as supply remains limited and at the same time concerns about the Omicron variant are easing.
US Federal Reserve Chairman Jerome Powell said on Tuesday that the US economy, the world’s largest oil consumer, would have to deal with the current rise in COVID-19 with only “short-term” consequences and was ready for a tightening monetary policy. .
Brent crude futures traded up $ 1.24, or 1.5%, at $ 84.96 a barrel. West Texas Intermediate (WTI) futures were up 2%, or $ 1.62, at $ 82.84 a barrel.
Shares, which often move in parallel with oil prices, also rose, while a weaker dollar also gave support. A weaker dollar makes oil contracts cheaper in dollars for holders of other currencies.
The Brent contract is showing a reversal, with this month’s contract being about $ 4.20 more expensive than a six-month delivery, suggesting a tight short-term offer.
OPEC + oil producers continue to hold more than 3 million barrels per day (bpd) in production, while Iranian exports are limited due to ongoing US sanctions. Although OPEC + producers increase production targets each month, technical difficulties have prevented many countries from achieving their quotas.
“Assuming China does not slow down sharply, that Omicron actually goes Omi-gone, and with OPEC + ‘s ability to increase production clearly limited, I see no reason why slow Brent should not be able to “Move to $ 100 in the first quarter, possibly earlier,” said Oanda analyst Jeffrey Halley.
US crude inventories fell 1.1 million barrels in the week ending Jan. 7, market sources said, citing data from the American Petroleum Institute (API).
Government figures are expected Wednesday.
On Tuesday, the US Energy Information Administration upgraded its outlook for oil demand, predicting that US demand will increase by 840,000 bpd in 2022, from an earlier forecast of 700,000 bpd.
Increase for natural gas
US futures contracts gained more than 13% on Wednesday as temperatures plummeted and forecasts point to an impending cold.
The contract for February delivery rose 13.3% to $ 4.818 a million British thermal units, the highest level since November.
Following the rise for much of 2021, gas prices fell 36% during the fourth quarter after high temperatures and as the Omicron variant caused market concern.
However, the contract increased by 47% for 2021 and has already increased by almost 30% for 2022.
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