Title: Brent near $80 as market shrugs off Omicron

Dec 28, 2021 06:45AM ET

By: AnalysisWatch

Oil prices extended gains on Tuesday, with Brent crude trading near $80 a barrel despite the rapid spread of the Omicron coronavirus variant, supported by supply outages and expectations that US inventories fell last week.

Brent crude was up $1.04, or 1.3%, at $79.64 a barrel by 1119 GMT. US West Texas Intermediate (WTI) crude rose $1.15, or 1.5%, to $76.72.

Both contracts hit new highs in less than a month.

The three oil producers had declared force majeure on some of their oil production this month due to maintenance issues and oil field shutdowns.

Meanwhile, a preliminary Reuters poll on Monday showed US crude inventories likely fell for a fifth straight week, while gasoline stocks were largely unchanged last week.

UK Health Secretary Sajid Javid said on Monday that England will not receive any new COVID-19 restrictions until the end of 2021 as the government awaits further evidence on whether the health service can cope with high infection rates.

US President Joe Biden, meanwhile, pledged to ease the shortage of COVID-19 tests as the Omicron variant threatens to flood hospitals and thwart travel plans.

The staffing shortage caused by Omicron led to thousands of flight cancellations over the Christmas weekend in the United States.

The number of symptomatic coronavirus cases in China rose for the fourth day in a row on Monday, and more infections were reported in Xian, prompting the city's 13 million residents to be quarantined.

Investors are looking forward to the OPEC+ meeting on January 4, when the alliance will decide whether to continue its planned 400 000 barrels per day increase in February.

At its last meeting, OPEC+ stuck to its plans to increase production in January, despite Omicron.