Energy demand concerns sparked by the mutant strain Gold Crude oil closed sharply higher at a two-week high

Financial community December 8 news, the coronavirus Omilon variant strain caused by the reduction in energy demand to alleviate fears, crude oil futures collectively closed higher, New York crude oil for the first time in two weeks to stand above $70.

The price of West Texas Intermediate crude oil for January delivery on the New York Mercantile Exchange rose $2.56, up 3.7 percent at $72.05 a barrel, after rising 4.9 percent on Monday. According to Dow Jones market data, U.S. crude oil hit its highest level since Nov. 24. Brent crude, the global benchmark for intercontinental exchanges, rose $2.36 in February to $75.44 a barrel by 3.2 percent, the highest closing record since Nov. 25.

Marshall Steeves, energy market analyst at IHS Markit, said: "Traders believe that the lethal threat of the new coronavirus Amy Kerong variant is not significant and expect it to have only a small impact on global economic growth. "Traders also expect holiday driving activity in the United States and other OECD countries to be hot." ”

The rise in crude oil prices has been aided by a combination of factors, including a deadlock in nuclear disarmament negotiations between Iran and other Western countries, reducing the likelihood of Iranian crude returning to the market, while fears of the epidemic have subsided.

Naeem Aslam, chief market analyst at AvaTrade, said the outlook for oil demand has returned positively, but oil supply remains tight as the economy recovers from the trough in 2020" Saudi Arabia's decision to raise the price of its crude oil sales to Asia and the United States, as well as OPEC+'s decision to stick to its plan to inject 400,000 barrels of crude into the market every day in January, support the argument that the outlook for oil demand is strong.

In addition, China's imports increased by 31.7% year-on-year and exports increased by 22% year-on-year in November. China's oil imports from the world's largest crude oil importer rose 14.3 percent year-on-year to 10.17 million bpd in November, up from 8.9 million bpd in the previous month but still below 11.04 million bpd in the same period last year, the data showed.

On Wednesday morning, traders will get an update on U.S. oil supplies from the Energy Information Administration. The American Petroleum Institute will release its own data later Tuesday. According to a survey conducted by Platts Energy News, analysts expect the average EIA to report a 1.2 million barrel reduction in U.S. crude inventories for the week ended Dec. 3. They also expect U.S. gasoline and distillate supplies to increase by 1.4 million barrels and 900,000 barrels, respectively.

In its monthly report released Tuesday, the EIA lowered its forecast for benchmark oil prices in the U.S. and 2022 for 2021 and 2022. The agency expects the average west Texas medium oil price to be $67.87 a barrel this year, down 1.7 percent from last November's forecast. The average brent crude oil price is expected to be $70.60 this year, down 1.4% from previous forecasts. The U.S. Energy Information Administration also cut its 2022 oil price forecasts for WTI and Brent crude by 2.7 percent and 2.6 percent to $66.42 and $70.05, respectively.

Steve Nalley, acting director of the EIA, said in a statement: "This is a very complex environment for the energy industry as a whole. Our forecasts for oil and other energy prices, consumption and production are likely to change significantly as we learn more about how reactions to the omicron variant could affect oil demand and the economy. ”

Among other energy products traded on the New York Mercantile Exchange, gasoline prices rose 2.8 percent to $2.10 a gallon in January and heating oil prices rose 2.5 percent to $2.225 a gallon in January. Natural gas prices for January deliveries rose 1.4 percent to close at $3.708/MMBtu.

This article originated from the financial world