- The positive news around the covid is increasing the appetite for risk and, together with the bullish inventory data, has pushed the WTI above $ 72.00 per barrel.
- The US FDA approves Pfizer’s covid pill and more studies have shown that Omicron is milder than Delta.
Sentiment has taken a turn for the better during the hours of the American session, with a number of positive developments around Covid-19 seemingly injecting a dose of optimism in an otherwise subdued market and on vacation mode. This is giving crude oil an upward momentum and WTI futures have risen above the $ 72.00 level in weekly highs. WTI rises about $ 1.1 on the day and the bulls are looking for a test of the $ 73.00 level, a key resistance zone that has limited price action throughout December so far.
In terms of recent positive developments, The US FDA has just approved Pfizer’s Paxlovid pill to treat Covid-19 infection in at-risk patients at home. As long as patients start treatment within five days of infection, the pill reportedly reduces at-risk hospitalization and mortality rates by up to an incredible 90%. Pfizer said it was ready to begin distributing the drug in the United States immediately, and other countries will likely approve the drug and start rolling it out soon as well.
On the other hand, more studies have been published on the severity of Omicron (one in Scotland and one in South Africa) and both strengthen the narrative that Omicron infection is significantly less likely to result in hospitalization. The above news will strengthen investors’ conviction that the blow to the global economy posed by Ómicron will not be catastrophic or long-lasting. Of course, this is great news for the crude markets, just as it is for other risk assets.
In addition, the official weekly oil inventories of the United States were released today and, as the private API weekly indicated on Tuesday, the reduction in crude stocks was much larger than expected at more than 4.7 million barrels. This supported crude prices.
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