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Oil starts 2022 with rally towards $79

On Monday, oil prices rose toward $79 per barrel, boosted by tight supply and expectations of further demand recovery in 2022, fueled in part by a belief that the Omicron coronavirus variant is unlikely to dampen the outlook significantly.

Due to pipeline maintenance, Libya’s oil output will reduce by 200,000 barrels per day for a week. At a meeting on Tuesday, OPEC and its allies, known as OPEC+, are expected to stick to a plan to increase output gradually. As of 0923 GMT, Brent crude was up 95 cents, or 1.2 percent, to $78.73 per barrel. West Texas Intermediate (WTI) crude in the United States rose $1.03, or 1.4 percent, to $76.24.

Globally, infection rates are rising, restrictions in several countries, and the air travel sector, among others, is suffering, but investors’ optimism is palpable.

It appears that the current strain produces less severe symptoms than its predecessors, which may help us get through the pandemic’s fourth wave. Brent rose 50% last year, fueled by the global recovery from the COVID-19 pandemic and OPEC+ supply cuts, even as infections reached all-time highs.

Crude and oil product prices should benefit from increasing oil demand above 2019 levels.

With over 4,000 flights canceled on Sunday, Omicron has brought record case counts and dampened New Year’s celebrations worldwide.

Gold was down in Asia on Monday morning, but higher U.S. Treasury yields supported the safe-haven asset amid rising COVID-19 cases. Trade was also sluggish because crucial Asia Pacific markets, such as China, Japan, and Australia, were closed for the holiday season.

Gold futures fell 0.11 percent to $1,826.25 after reaching a more than one-month high of $1,831.49 earlier. At the end of 2021, benchmark 10-year U.S. Treasuries experienced the most significant yield increase since 2013.

On December 31, U.S. stocks closed near record highs in thin trading, capping off the second year of recovery from the COVID-19 pandemic.

Meanwhile, rising COVID-19 cases, with an average of over a million points, are also on investors’ radars.

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