Oil starts the new year positively, pandemic worries curb gains

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SINGAPORE – Oil prices rose on Monday when the market started positively in 2022, although concerns about declining demand due to the rapid spread of the COVID-19 pandemic have limited gains.

Brent crude added 67 cents, or 0.86%, to $ 78.45 a barrel at 1:02 GMT. West Texas Intermediate oil futures rose 77 cents, or 1.02%, to $ 75.98 a barrel.

Last year, oil prices rose by about 50%, driven by the recovery of the global economy from the fall of the COVID-19 pandemic and the containment of producers, even as contagions reached record highs worldwide.

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U.S. health experts have warned Americans to prepare for serious disruptions in the coming weeks, with the infection rate likely to worsen due to increased vacation travel, New Year’s celebrations and the reopening of schools after the winter holidays.

Oil analysts have lowered their price forecasts for 2022 because the coronavirus variant Omicron is an obstacle to the recovery of fuel demand and risks oversaturation of supply because producers are pumping more oil, a Reuters poll showed on Friday.

The study, which included 35 economists and analysts, predicts that Brent oil will cost an average of $ 73.57 per barrel in 2022, which is about 2% less than the consensus of $ 75.33 in November. This is the first reduction in the price forecast for 2022 since the August poll.

U.S. crude oil is projected to average $ 71.38 a barrel in 2022, up from a consensus of $ 73.31 a month earlier.

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U.S. energy companies have added oil and natural gas wells for a record 17 months in a row, as higher prices lured some drills back to the well after last year’s drop in demand caused by the coronavirus.

U.S. crude oil production rose to 11.47 million barrels a day in October, up 6% from a month earlier, as production rose in the Gulf of Mexico as the region recovered from the hurricane, according to a monthly report released Thursday. for energy information.

The Organization of the Petroleum Exporting Countries, Russia and its allies – collectively called OPEC + – are likely to stick to their plan to add 400,000 barrels a day in February when they meet on January 4, four sources said.

Commodity prices, from energy and metals to agricultural products, recovered sharply in 2021, with energy fuels leading the way, driven by scarce supplies and a strong economic recovery as COVID-19 vaccinations prevented widespread blockades. (Reporting by Naveen Thukral; Editing by Michael Perry)