Oil prices jump three per cent as new variant concerns ease

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On Monday, both US and UK crude oil futures’ prices had skyrocketed more than 3 per cent, mostly driven by optimism that a much-debated Omicron variant would have limited impacts on global economy next year, as investors appeared to have joined a Santa rally followed by a holiday-thinned week.

In point of fact, later last week, a study from S. African physicians had unveiled that the newly identified pandemic variant would unlikely to cause hospitalization in most cases, while in a high-risk demographics, chances of hospitalization requirement in Omicron-infected patients are 70 per cent lower than those of other variants such as delta.

Apart from that, a US FDA (Food and Drug Administration) for first in-house pandemic Rx from Pfizer Inc had ramped up investors’ morale further. Nonetheless, a spike in pandemic cases across the resource-rich Gulf, which could lead to a drawdown in crude oil output in Opec+ nations, added a bullish breeze in the day’s commodity market.

Adding to further impetus, a British lawmaker was quoted saying earlier in the day that Britain would not impose any new pandemic-associated restrictions this year, eventually spurring up hopes of a demand-surged earlier in 2022.

Besides, impacts of an output hike from OPEC+ nations by 400,000 barrels per day from February, had been offset by a stalemate in Iran-US nuclear talk with both sides making little progress towards a renewal of 2015 nuclear deal thus far.

Oil climbs over 3 per cent as Omicron disquiets ease

Citing statistics, in the day’s global commodity market wind-down, UK crude settled 3.4 per cent higher to $78.69 a barrel, while US West Texas Intermediate (WTI) crude oil contracts gained 2.5 per cent to $75.64 per barrel.

Meanwhile, addressing to a relatively milder impact of Omicron variant on infected demographics, an analyst at Singapore-based DailyFX, Leona Liu said, “Though Omicron is spreading faster than any COVID-19 variant yet, a relatively relieving news is that most people infected with Omicron are showing mild symptoms, at least so far”.