Title: Oil price steadies near $75, Omicron concerns dominate

Dec 14, 2021 04:35AM ET

By: AnalysisWacth

Oil prices rose on Tuesday, settling around $75 a barrel, offsetting the previous day's declines as investors continued to weigh the impact of renewed restrictions in Europe and Asia related to the spread of the Omicron coronavirus.

At 0910 GMT, Brent crude futures were up 47 cents, or 0.63%, at $74.26 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 48 cents, or 0.67%, at $71.77.

Governments around the world, most recently in Britain and Norway, have tightened restrictions to stop the spread of the Omicron variety.

This year, China's Zhejiang province, a major manufacturing province, is struggling with its first COVID-19 cluster. Tens of thousands of citizens in the quarantined and virus-affected areas have suspended business activities, cancelled flights, and cancelled events.

The Organization of the Petroleum Exporting Countries on Monday raised its forecast for global oil demand in the first quarter of 2022, maintaining its timetable for a return to pre-pandemic oil consumption, saying the impact of the Omicron coronavirus will be small and short-lived.

At the same time, the Asian Development Bank lowered its growth forecasts for developing Asia this year and next to reflects the risks and uncertainty caused by the variant, which could also dampen oil demand.

On the supply side, OPEC and other major producers, including Russia, in a group known as OPEC+, plan to gradually increase supply by 400,000 barrels per day (bpd) each month after sharply cutting output last year.

Production in the largest US shale basin is expected to reach a record in January, according to a monthly forecast released on Monday by the US Energy Information Administration.