Oil Extends Omicron Relief Rally With Demand Concerns Easing

  • Bloomberg
  • Commodities News
Oil Extends Omicron Relief Rally With Demand Concerns Easing
Credit: © Reuters.

(Bloomberg) -- Oil extended gains as initial studies showed existing vaccines are effective against the omicron variant of the virus, easing demand fears.

Futures in New York rose toward $73 a barrel on Thursday after jumping more than 9% over the prior three sessions on optimism that the new strain won’t derail the economic recovery. Pfizer Inc. (NYSE: PFE ) and BioNTech SE (NASDAQ: BNTX ) said initial lab studies show a third dose of their vaccine may be needed to neutralize omicron.

U.S. crude stockpiles, meanwhile, dropped by a modest 241,000 barrels last week for a second weekly draw, according to government data. Inventories of gasoline and distillates, a category that includes diesel, rose.

Oil has rebounded after falling for six weeks, in part due to major consumers signaling they would release strategic crude reserves to tame energy prices and the emergence of omicron. While demand hasn’t taken a big hit from the new variant, some nations have implemented restrictions on air travel and U.K. Prime Minister Boris Johnson has tightened pandemic rules.

U.S. gasoline stockpiles rose by 3.88 million barrels last week, according to the Energy Information Administration. Distillate inventories increased by 2.73 million barrels, while crude supplies at the key storage hub of Cushing climbed for a fourth week above 30 million barrels, the EIA said.

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