Oil extends gains with fears eased over COVID-19 variant

ISTANBUL

Oil prices increased on Monday with concerns eased over the impact of the new COVID-19 omicron variant on the global economic recovery and fuel demand.

International benchmark Brent crude was trading at $75.97 per barrel at 0723 GMT for a 1.09% increase after closing the previous session at $75.15 a barrel.

American benchmark West Texas Intermediate (WTI) was at $72.39 per barrel at the same time for a 1% gain after trade ended at $71.67 a barrel in the previous session.

Prices continued rising over relief that the omicron variant is so far showing only mild symptoms and scaling back new restrictions.

Ozlem Tureci, one of BioNTech's two Turkish-German co-founders, told a news conference on Dec. 8 that preliminary laboratory studies demonstrated that three doses of the Pfizer-BioNTech COVID-19 vaccine neutralized the omicron variant of the coronavirus.

As countries announce plans to roll out vaccine boosters with daily infections approaching an all-time high, South African scientists see no sign that the new variant is causing more severe illness.

Moreover, Richard Mihigo, the coordinator for immunization and vaccines development in the South African regional office of the World Health Organization (WHO), noted that few of the many people infected with omicron in South Africa have had to be hospitalized. He said from the preliminary analysis it looks as if the new variant may cause less severe illness, but at least another two or three weeks are needed to determine omicron's full effects.

However, the WHO said Sunday that early data suggests that omicron is more transmissible than the delta strain, reduces vaccine efficacy, and causes less severe symptoms.

"While preliminary findings from South Africa suggest it may be less severe than delta, and all cases reported in the EU/EEA to date have been mild or asymptomatic, it remains unclear to what extent omicron may be inherently less virulent," the WHO said.

Oil markets remain cautious, however, as the US Department of Energy said on Friday it would sell 18 million barrels of crude oil from its strategic petroleum reserve on Dec. 17, as part of a previous plan to reduce gasoline prices.

Markets are also closely watching developments before the next meeting of the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, on Jan. 4.

Iraq's oil minister said Sunday he expects a continuation of the group's current monthly production policy of gradually increasing output by 400,000 barrels per day.

The US oil rig count, an indicator of short-term production in the country, rose last week, according to the latest data released by oilfield services company Baker Hughes on Friday.

The number of oil rigs increased by 4 to 471 for the week ending Nov. 10 from 467 the previous week. On an annual basis, the oil rig count rose by 213 this year.