Oil Resumes Upward Climb As Traders Re-Assess Omicron Threat

Meanwhile, Saudi Arabia boosts oil prices despite the variant's rapid global spread: File image/Pixabay

With traders finally taking to heart what scientists have said about the omicron variant from the beginning – that it is shaping up to be a weak strain not causing any hospitalization surges, let alone any deaths – crude prices on Monday made substantial gains.

West Texas Intermediate rose 4.9 percent to settle at $69.49, and Ed Moya, senior market analyst at Oanda Corp., remarked, "It seems Wall Street is optimistic that the growth story is still intact as omicron seems like it might be leading to less serious illness than delta."

More good news from the economic recovery front: while headline U.S. payroll growth had proved disappointing in November, the survey of households was far stronger with a 1.1 million jump in jobs, which in turn took overall unemployment rates down to 4.2 percent.

Another development that presumably buoyed crude traders was the White House stating during a briefing that chances of Iran rejoining the nuclear deal may be slipping away.

Meanwhile, Saudi Arabia increased its oil prices for customers in Asia and the U.S. for January to the highest since 2000, days after the Organization of the Petroleum Exporting Countries (OPEC) agreed to boost output for the same month.

Some experts noted that this was done despite the rapid spread of omicron around the world: another indication that demand fears due to the variant were grossly overblown.

Also on Monday, Halliburton Co. was on hand to redirect Covid worriers to another concern by warning that the world is headed into a period of oil scarcity, after seven years of under investment.

Jeff Miller, chief executive officer at the Houston-based contractor, said, "For the first time in a long time, we'll see a buyer looking for a barrel of oil as opposed to a barrel of oil looking for a buyer."

Finally on Monday, U.S. president Joe Biden's nod at reducing prices at the pump got underway, with bids due for the first 32 million barrels of crude planned for release from federal stockpiles; at least two international oil refiners have reportedly expressed interested in the swap.