Oil prices fell on Friday, but were set to show their biggest annual rise in 12 years, spurred by the global economic upturn following the decline in covid-19 and producer restraint, even as infections rose to record highs around the world.
Brent oil futures fell 31 cents, or 0.4%, to $ 79.22 per barrel at 0427 GMT, while US West Texas Intermediate (WTI) crude oil futures fell 37 cents, or 0.5%, to $ 76.62 per barrel .
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Brent is on track to end the year up by 53%, while WTI is heading for a 57% gain, the strongest performance for the two benchmark contracts since 2009, when prices rose more than 70%. Both contracts peaked in 2021[ads1] in October with Brent at $ 86.70 a barrel, the highest since 2018, and WTI at $ 85.41 a barrel, the highest since 2014.
Global oil prices are expected to rise further next year as demand for aviation fuel picks up.
“We have had Delta and Omicron and all kinds of shutdowns and travel restrictions, but the demand for oil has remained relatively stable. You can attribute that to the effect of stimuli that support demand and restrictions on supply,” said the Australian brokerage firm CommSec’s chief economist. Craig James.
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After rising for several days in a row, oil prices stopped on Friday as COVID-19 cases rose to new pandemic heights across the globe, from Australia to the United States, driven by the highly transmissible Omicron coronavirus variant.
U.S. health experts warned Americans to prepare for serious disturbances in the coming weeks, with infection rates likely to worsen amid increased holiday travel, New Year celebrations and school reopening after the winter holidays.
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With oil hovering near $ 80, the Organization of the Petroleum Exporting Countries, Russia and allies, collectively known as 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. as they continue to pull back strong production cuts implemented in 2020.
“I think we will see a lot of pressure on OPEC + to ensure that there is enough oil delivered to the market,” said James.
(Reporting by Sonali Paul and Florence Tan; Editing by Sam Holmes)