Oil prices stable as positive Covid-19 news balances curbs

[LONDON] Oil prices were broadly stable on Thursday as signs that the worst effects of the Omicron variant might be more containable than previously feared were countered by new Covid-19 restrictions amid surging infections.

Brent crude futures were up 27 cents, or 0.4 per cent, at US$75.56 a barrel at 10.51 am EST (1551 GMT), after a 1.8 per cent gain in the previous session. US West Texas Intermediate (WTI) crude futures rose 20 cents, or 0.3 per cent, to US$72.97 a barrel after jumping 2.3 per cent in the previous session.

"Oil's direction is entirely reliant on Omicron headlines, and as long as they stay more contagious but less virulent, oil's rally is likely to continue, with intra-day ranges exacerbated by thin liquidity," said Oanda market analyst Jeffrey Halley.

Both contracts are set for a third straight day of gains. So far this year, Brent has risen around 46 per cent and WTI 50 per cent.

The big gains on Wednesday were partly spurred by a larger-than-expected drawdown in US crude stockpiles last week.

The United States authorised Pfizer Inc's antiviral Covid-19 pill for people aged 12 and older, the first oral and at-home treatment as well as a new tool against the fast-spreading Omicron variant.

Meanwhile, AstraZeneca said a three-dose course of its Covid-19 vaccine was effective against Omicron, citing data from an Oxford University lab study.

On the flip side, governments reimposed a range of restrictions to slow the spread of Omicron.

The Chinese city of Xian on Wednesday ordered its 13 million residents to stay home, while Scotland imposed gathering limits from Dec 26 for up to three weeks, and two Australian states reimposed mask mandates.

The Organization of the Petroleum Exporting Countries (Opec), Russia and allies have left the door open to reviewing their plan to add 400,000 barrels per day of supply in January.

REUTERS