A reversal in today’s session with oil prices offsetting initial losses and closing with gains, as investors appeared willing to buy assets considered “risky”, despite concerns about the spread of the Omicron mutation.
US crude was under pressure at the start of the session, as disruptions to the global flight program continued today, raising concerns about energy demand.
More than 2,100 flights were canceled on Monday by airlines around the world, with the Omicron variant disrupting travel during the holidays, as company employees – mostly pilots – were in quarantine.
Flightaware recorded almost 8,000 cancellations over the Christmas weekend and expects another 800 for tomorrow, Tuesday.
However, investors focused on more optimistic news. Among others the The People’s Bank of China has pledged greater support for the real economy, with the central bank saying it will target targeted monetary policy measures to stimulate the world’s second-largest economy.
Phil Flynn, an analyst at PRICE Futures Group, said the markets were backed by reports that British Prime Minister Boris Johnson was not prepared to impose new restrictive measures at this time.
Meanwhile traders are waiting for the OPEC + meeting on January 4.
“The agency is expected to stick to its decision to increase oil production by an additional 400,000 barrels per day, although some analysts say it will be more cautious about developments with Omicron,” said Fawad Razaqzada, an ThinkMarkets analyst. .
“If it maintains the status quo, I think oil prices will be pushed,” he added.
In this climate, the West Texas Intermediate February delivery strengthened $ 1.78, or 2.4%, to settle at $ 75.57 a barrel on the New York Mercantile Exchange.
Oil type Brent delivery February climbed $ 2.46, or 3.2%, to $ 78.60 a barrel.
Finally the January delivery contract for natural gas added 32.9 cents, or 8.8%, to close at $ 4.0600 per 1 million British thermal units. The January contract expires at the end of Wednesday’s meeting.
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