Demand and growth seem to be unaffected by the mild Covid strain: File image/Pixabay
While initially the media-driven fear mongering over the omicron variant had a severe impact on the crude market, oil on Friday was poised to log its biggest weekly gain in over three months on evidence that the strain is mild and would have limited impact on demand.
Also, Pfizer and BioNTech said this week their booster shot promises to be effective against the variant.
However, skittish politicians in many countries have re-imposed varying levels of lockdowns, thus curbing investor confidence and contributing to the prompt time spread for global benchmark Brent to narrow this week – a sign of bearish sentiment.
Ed Moya, senior market analyst, Oanda Corp
The 2022 growth outlook for the U.S. economy remains mostly undeterred
West Texas Intermediate on Friday rose 73 cents to settle at $71.67 per barrel; Brent also increased 73 cents, to settle at $75.15 per barrel.
Ed Moya, senior market analyst at Oanda Corp., said, "Crude prices are having a good week as omicron jitters have eased and as the 2022 growth outlook for the U.S. economy remains mostly undeterred."
JPMorgan is another analytical body to express confidence in the energy sector moving ahead: it credited favourable commodity prices, healthy balance sheets and capital return plans as reasons for optimism and cited Exxon Mobil, Phillips 66, and Suncor Energy as among its favourite stock picks.
Meanwhile, the U.S. Department of Energy on Friday reported that Exxon was the first company to be granted oil from president Joe Biden's release from the country's Strategic Petroleum Reserve; the company will receive 4.8 million barrels, and the department went on to note that it will issue the sales notice for 18 million barrels from the SPR on Dec. 17.
In other oil news on Friday, traders familiar with the matter told media that Belorusneft has cancelled its 2022 export plans to Germany via the Druzhba pipeline, following new European Union sanctions on the company.
The sanctions are aimed at increasing the pressure on president Alexander Lukashenko, who was accused of rigging his election and pushing Middle Eastern migrants towards the Poland border.