Oil prices see their biggest weekly gain since August

Friday’s slight rise in oil prices was accompanied by the largest weekly gain since August. Market sentiment was buoyed by decreasing concerns about the Omicron coronavirus variant’s effect on global economic growth.

Brent and U.S. West Texas Intermediate crude benchmarks posted gains of around 8% this week. This is their first weekly gain in seven weeks, even after a brief period of profit-taking.

Brent futures closed up 73c or 1% at $75.15 per barrel after falling 1.9% Thursday.

WTI fell 2%, or 73 cents to $71.67, after sliding 2% in volatile sessions the day before.

Phil Flynn, the senior analyst in Chicago’s price futures group, stated that oil traders are feeling more optimistic after coming out of shell shock. He said that they feel more bullish now that they have recalibrated their demand expectations following the Omicron variant of the coronavirus.

According to government data, U.S. consumer prices increased in November, resulting in the largest year-on-year increase since 1982. This reflects bullish sentiment about oil demand.

The oil market recovered approximately half of the losses sustained since Nov. 25’s Omicron outbreak. Prices were lifted by early studies that suggested three doses of Pfizer’s COVID-19 vaccine provides protection against the Omicron variant.

“The oil market has therefore correctly priced out the worst-case scenario again, but it would have been wise to leave some residual risk to oil demand in position,” Carsten Fritsch, Commerzbank analyst.

China’s tighter travel restrictions and lower consumer confidence following repeated small outbreaks are causing a slowdown in domestic air traffic.

Fitch, a rating agency, downgraded China Evergrande Group (property developers) and Kaisa Group (property developers), claiming that they had defaulted in offshore bonds.

This increased fears about a slowdown in China’s property sector and the wider economy of the largest oil importer worldwide.

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