Oil prices gained on Thursday, recouping the previous day’s losses, as speculators repositioned themselves ahead of an OPEC+ decision on supply policy. However, gains were limited due to concerns that the Omicron coronavirus variety may affect fuel consumption.
Since last Thursday, when investors were shocked by the revelation of Omicron, global oil prices have dropped by more than $10 per barrel. Brent crude futures were up 85 cents, to $69.72 at 0402 GMT, after falling 0.5 percent the day before.
After a 0.9 percent loss on Wednesday, US West Texas Intermediate (WTI) oil futures rose 85 cents, or 1.3 percent, to $66.42 a barrel. On Thursday, the Organization of Petroleum Exporting Countries (OPEC) and its partners will most likely decide whether to supply more oil into the market as planned or to limit supplies.
Omicron might exacerbate supply-chain issues and shortages that have contributed to rising inflation, and regulators will need to account for this when deciding how to withdraw monetary policy assistance. As it gradually reduces record cuts planned in 2020, the group has added 400,000 barrels per day of oil output to global supplies each month.
Due to the rapid and significant decrease in oil prices over the past week, investors unwound their positions ahead of the OPEC+ decision. However, the new variation has complicated the decision-making process, with some analysts believing that OPEC+ could stop supply additions in January to curb supply growth.
In Asia on Thursday morning, Gold was down, but it had recovered from a three-week low. Investors argue how central banks will respond to rising inflation, while fears about the risk posed to the global economic recovery by the newly identified omicron version of COVID-19 are growing.
On Thursday, gains in oil markets were restricted as weekly inventory data from the United States revealed that crude stocks decreased less than predicted last week. In contrast, gasoline and distillate inventories surged considerably more than expected as demand deteriorated.
Silver was up 0.3 percent, platinum was up 0.2 percent, and palladium was up 0.2 percent in other precious metals.