Oil futures rose Tuesday, with expectations the omicron variant COVID-19 virus won’t derail demand in the face of tight supplies continuing to provide support.
West Texas Intermediate crude for February delivery
CL00,
CLG22,
up $1.20, or 1.5%, at $79.43 a barrel on the New York Mercantile Exchange. March Brent crude
BRN00,
BRNH22,
the global benchmark, rose $1.13, or 1.4%, to $82 a barrel on ICE Futures Europe. WTI and Brent have both rallied more than 5% so far in the new year.
Tuesday’s gains came despite reports that production in Libya had recovered and that activity at Kazakhstan’s Tengiz oil field had returned to normal. Worries about hits to production in the two countries had helped lift crude last week.
Oil production in Libya has returned to 1 million barrels a day after militias lifted a three-week blockade of oil fields, including the nation’s largest, Bloomberg reported. Chevron Corp.
CVX,
which leads the Tengizchevroil consortium, said production at Kazakhstan’s 600,000-barrel-a-day Tengiz oil field has returned to normal after being disrupted by unrest last week, according to Argus.
While exports from the Libya’s western oil ports are likely to begin again soon, exports “from most of Libya’s other oil ports have been suspended due to bad weather this week, meaning that the higher oil production in the country has not yet translated directly into an increase in available oil supply,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note. “This may explain why oil prices have not responded as yet to the reopening of the Libyan oil fields.”
While COVID-19 cases continue to soar amid the spread of the omicron variant, governments have largely shied away from imposing strict lockdowns, analysts said.
