The price of US light crude WTI has recovered 4% this week and has climbed more than 50% since the start of 2021, despite the correction since November against a background of delta and omicron variants.
(Boursier.com) – Oil rose Thursday evening, benefiting from renewed optimism following the publication of medical studies showing that the Omicron variant would cause fewer severe cases of Covid-19 than previous variants of the coronavirus.
The barrel of American light crude WTI gained 1.4% to $ 73.79 (February Nymex futures contract), while the Brent de Mer du Nord jumped 2.07% to $ 76.85 (March contract). In the absence of quotations scheduled for Friday on the Nymex, due to Christmas, WTI regained 4% for the whole week, and climbed more than 50% since the start of 2021, supported by the recovery in global demand, after the shock of the Covid-19 pandemic in 2020.
Omicron very contagious, but less virulent than Delta
Black gold has, however, corrected by around 13% from its high of the year, reaching around $ 85 per barrel in WTI in early November. A halt linked to the Delta variant wave, followed by the Omicron wave, which raises fears of a slowdown in demand, especially from the airline sector, due to new travel restrictions linked to the pandemic.
However, several British and South African studies on Thursday showed that the Omicron variant would be less likely to cause a severe form of Covid-19 than the Delta variant. Additionally, South African data suggests that the Omicron wave now appears to be falling as quickly as it was rising. At the same time, the vaccination campaigns were strong in the United States and in Europe, in particular for the booster doses, which effectively protect against Omicron like other variants.
Sharp drop in US crude stocks, gas boom in Europe
After a sharp drop on Monday, crude prices were supported by the publication on Wednesday of a sharp drop in oil reserves in the United States. These have down 4.7 million barrels in the week ended December 17 to 423.6 mb, while the consensus was counting on a decline limited to 2.5 mb. The previous week, these stocks had already fallen sharply by 4.6 mb.
Oil has also benefited this week from a new heat wave in natural gas prices in Europe. The reference price, the Dutch TTF, set a new record on Tuesday, boosted by the onset of winter as well as tensions between Ukraine and Russia, which provides a third of Europe’s needs. The TTF soared on Tuesday by more than 22% to finish at 180.267 euros per megawatt hour (MWh), after a peak at 187.785 euros in session.