SINGAPORE (BLOOMBERG) – Oil rose after Saudi Arabia boosted the prices of its crude, signaling confidence in the demand outlook despite the spread of the Omicron variant of the coronavirus.<\/p>\n
Futures in New York advanced more than 2 per cent to trade near US$68 a barrel. The kingdom increased its oil prices for customers in Asia and the U.S. for January, just days after the OPEC+ alliance agreed to boost output for the same month.<\/p>\n
Meanwhile, initial data on Omicron from South Africa – the epicenter of the outbreak – doesn’t show a resulting surge of hospitalisations.<\/p>\n
Oil capped a sixth weekly loss on Friday (Dec 3), the longest stretch of declines since 2018, following concerns about the outlook for energy demand as Omicron led to renewed restrictions on travel.<\/p>\n
While OPEC+ decided to keep adding extra barrels to the market in January, the alliance essentially placed a floor under prices by giving itself the option to change the plan at short notice.<\/p>\n
“The Saudi move to increase pricing is driving the market today,” said Mr Warren Patterson, Singapore-based head of commodities strategy at ING Groep. “A bit of an odd move, given the supply hike in January, the omicron uncertainty and the expectation of a better supplied market in the first quarter of 2022.”<\/p>\n
Saudi Aramco raised its key Arab Light grade for customers in Asia by 60 US cents from December to US$3.30 a barrel above a benchmark, according to a statement from the state producer.<\/p>\n
That followed comments last week from Aramco chief executive Amin Nasser that he was “very optimistic” about demand and that the market had overreacted to Omicron.<\/p>\n
White House medical adviser Anthony Fauci said Sunday that there doesn’t look to be a great degree of severity to the new strain, while cautioning it’s too early to be certain. Omicron has so far spread to at least 17 U.S. states.<\/p>\n
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