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Oil up, Omicron news

Oil rose in Asia. It extended gains as concerns about the impact of the Omicron COIVD-19 variant on economic recovery and fuel demand subsided. Brent oil futures were up 0.51 percent to $76.21, while WTI futures were up 0.77 percent to $72.92.

Early indications of the Omicron variant suggest that it may be less severe than initially feared, given that hospitalization rates have not increased.

A third vaccine dose also shows good protection against the new variant. As some governments reimposed restrictive measures to limit the spread of Omicron, the gains of the black liquid were limited. The United Kingdom mandated work-from-home policies, while Denmark closed restaurants, bars, and schools. China has also put a halt to group tourist trips departing from Guangdong.

The risks to demand have not entirely abated, citing Omicron’s discovery as the catalyst for a 16 percent drop in Brent futures from November 25 to December 1. Although more than half of these losses recovered so far this week, some investors have warned that further recovery may be limited until the impact of Omicron on fuel demand is clearer.

According to OANDA analyst Craig Erlam, Brent futures are likely to face resistance near the lower end of the $76.50-$77.50 range, a critical support level in late September and late November 2021. Meanwhile, the U.S. Energy Information Administration reported a 240,000-barrel draw in crude oil supply for Wednesday, the week ending December 3.

Gold fell in Asia on Thursday morning while the U.S. dollar and Treasury yields rose. Investors are now looking forward to U.S. inflation data, which could hint at the Federal Reserve’s next policy move.

Gold futures were 0.66 percent higher at $1,671.75.

Benchmark Treasury yields on 10-year notes have remained close to their highest level since November 29, which reach on Wednesday following a 10-year note auction.

The consumer price index (CPI) for the United States is due on Friday. Investors also digested Wednesday’s JOLTs job openings figure, which increased to 11.033 million in October from 10.033 million in September. However, a decrease in hiring indicates a worsening labor shortage. The majority of respondents also stated the risk of increased interest even sooner.

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