Oil Prices Rise Sharply

Oil prices rose today, Tuesday, despite the continued concern of investors about the rapid spread of the Omicron virus globally, which prompted countries to consider more restrictions that are likely to affect the demand for fuel.

Brent crude futures rose by $1, or 1.45%, to record in contracts for February delivery, $72.6 a barrel at the time of writing, while US crude futures rose $1.15, or 1.7%, to $69.97 a barrel.

British Prime Minister Boris Johnson said on Monday he would tighten coronavirus restrictions to slow the spread of the mutated Omicron if needed, the Netherlands began its fourth lockdown, and other European countries considered Christmas restrictions.

Omicron infections are multiplying rapidly across Europe and the United States, averaging every two or three days in London and elsewhere and taking huge losses in financial markets, which fear the impact on the global economic recovery.

However, Moderna said on Monday that a booster dose of the Covid-19 vaccine is enough to give immunity to the rapidly spreading omicron mutant in lab tests, providing some hope for investors.

On the supply side, two sources from the OPEC+ alliance told Reuters that adherence to oil production cuts rose to 117% in November from 116% a month ago, indicating that production levels are still well below agreed targets.

A preliminary Reuters poll showed on Monday that US crude oil inventories are expected to decline for the fourth consecutive week, while distillate and gasoline stocks likely rose last week.