Oil Extends Gains to Near 1-Month High

WTI crude futures rose more than 1% to trade around $73.5 per barrel on Thursday, hovering near 4-week highs, amid an improvement in risk appetite as economic optimism grows.

Despite the rise in Covid-19 cases and new restrictions, investors are betting that the economic recovery will not derail as studies showed that the omicron variant is less severe than previous strains, albeit more infectious. Also, US crude stockpiles declined more than expected.

US inventories fell by 4.72 million barrels, its fourth straight weekly draw and well above market estimates for a 2.75-million-barrel decline.

Tightness in supply has also been exacerbated by an energy crunch in Europe and supply disruptions in Africa. Natural gas prices in Europe surged to record highs as flows from a key Russian pipeline stopped, forcing some countries to boost electricity imports and burn oil to meet demand.