MOSCOW (MRC) -- Oil prices rose nearly USD2 on Tuesday, extending the previous day's almost 5% rebound as concerns over the impact of the Omicron coronavirus variant on global fuel demand eased and Iran nuclear talks stalled, delaying the return of Iranian crude, reported Reuters.
Brent crude futures were up USD1.67, or 2.3%, at USD75.75 a barrel by 1323 GMT, having registered a 4.6% gain on Monday. US West Texas Intermediate crude was up USD1.90, or 2.7%, at USD71.39, building on a 4.9% gain in the previous session.
Oil prices were pummelled last week by concerns that vaccines might be less effective against the Omicron variant, sparking fears that governments could impose fresh restrictions to curb its spread and hit global growth and oil demand.
However, a South African health official reported over the weekend that Omicron cases there had shown only mild symptoms. Also, the top US infectious disease official, Anthony Fauci, told CNN that "it does not look like there's a great degree of severity" so far.
In another sign of confidence in oil demand, the world's top exporter, Saudi Arabia, raised monthly crude prices on Sunday.
That came after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, agreed to continue raising output by 400,000 barrels per day (bpd) in January despite the release of US strategic petroleum reserves.
Crude imports to top importer China also rebounded in November and a Reuters poll showed that US crude inventories are likely to have fallen for a second straight week last week.
Oil prices were also supported by delays to the return of Iranian oil, with indirect nuclear talks between the United States and Iran having hit stumbling blocks. Germany urged Iran on Monday to present realistic proposals in talks over its nuclear programme.
As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.
We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.
We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.