Oil prices were higher in Asia on Monday morning, recouping some of Friday’s losses. Investors began bargain shopping despite finding the new Omicron COVID-19 type and the restart of the Iran nuclear agreement negotiations.
By 10:23 p.m. ET (3:23 a.m. GMT), Brent oil futures had risen 4.62% to $74.90, while WTI futures had gained 5.24 % to $71.72. Concerns over the new type and a probable substantial supply excess in the first quarter of 2022 caused the black liquid to fall by more than 10% on Friday. This was its worst one-day decrease since April 2020.
International outlook on the oil market
The World Health Organization designated Omicron as a variant of concern. It is unclear if it is more transmissible or harmful than other variations. Over the weekend, Omicron cases were recorded in the Netherlands, Denmark, and Australia. OPEC+ also postponed its joint ministerial monitoring committee meeting from Tuesday to Thursday. It did this allegedly to allow more time to examine the impact of the omicron variation on oil demand and pricing. The OPEC and broader OPEC+ meetings will come on Wednesday and Thursday. The cartel will decide whether to go forward with its plan to increase output by 400,000 barrels per day in January 2022 and beyond.
After the United States led a coordinated release from the Strategic Petroleum Reserve last week and Omicron’s possible influence on gasoline consumption, several investors have called for a freeze in these hikes.
On Monday, Japan, the world’s third-largest economy, said to seal its borders to visitors. The country is joining Israel in implementing the strongest steps against the virus. The development of Omicron has posed a fresh challenge to OPEC+, which is meeting this week to decide strategy.
The group has postponed technical meetings this week to analyze Omicron’s influence on demand. However, Russia has stated that there is no need for the immediate market action, dismissing the likelihood of modifications to the OPEC+ oil contract. According to the oil market, the talks on restoring the 2015 Iran nuclear deal, which might contribute to global supply if they achieve the deal, will resume on Monday.
