Dec 07, 2021 02:35AM ET
By: AnalysisWatch
Oil costs expanded additions on Tuesday in the wake of rising almost 5% the earlier day as worries about the effect of the Omicron coronavirus on global fuel demand eased, while nuclear talks with Iran stalled and the return of Iranian crude was delayed.
At 0720 GMT, Brent crude futures were up $1.12, or 1.5%, at $74.20 a barrel, after trading 4.6% higher on Monday. US West Texas Intermediate crude was trading at $70.71 per barrel, up $1.22, or 1.8 percent, from the previous session.
Oil prices had slumped last week on fears that vaccines against Omicron would be less effective, fuelling fears that governments would again impose restrictions to curb the spread of Omicron, hurting global growth and oil demand.
Nonetheless, a South African wellbeing official revealed at the end of the week that Omicron cases there had shown just gentle side effects. The top US infectious disease official, Anthony Fauci, also told CNN that, so far, it does not appear that the disease is of high severity.
In another sign of confidence in oil demand, the world's largest exporter, Saudi Arabia, raised monthly crude prices on Sunday. This came after the Organization of the Petroleum Exporting Countries and its allies, a group is known as OPEC+, agreed to increase output by 400,000 barrels a day in January despite the release of US strategic petroleum reserves.
Likewise, a deferral in the arrival of Iranian oil upheld costs. Roundabout atomic discussions between the US and Iran have hit deterrents. Germany approached Iran on Monday to make sensible recommendations in the discussions on its atomic program.
Meanwhile, Iraq has also expressed optimism about demand and higher prices, while oil and gas industry executives around the world have warned of insufficient investment and the need for fossil fuels despite a push towards clean energy.