Oil rises above $ 78 due to optimism about the outlook for 2022

Oil storage containers are seen, in the midst of the coronavirus pandemic (COVID-19), in Los Angeles, California, USA, April 7, 2021. REUTERS / Lucy Nicholson

LONDON, Jan. 3 (Reuters) – Oil rose above $ 78 a barrel on Monday, backed by tight supply and hopes of a further improvement in demand in 2022, despite OPEC + appearing to agree to a further increase in production and still concern about the demand effect of increasing coronavirus cases.

OPEC and its allies, or OPEC +, are expected to agree to an increase in production on Tuesday. read more The Omicron coronavirus variant has brought a record number of cases and dampened New Year celebrations around the world, with more than 4,000 departures on Sunday. read more

Brent oil was up 39 cents, or 0.5%, to $ 78.17 a barrel at 1444 GMT, after rising as high as $ 79.05 previously. US West Texas Intermediate (WTI) oil fell 25 cents or 0.3%, to $ 74.96.

“Infection rates are rising globally, restrictions are being introduced in several countries, including the aviation sector is suffering, but investors’ optimism is palpable,” said Tamas Varga of oil broker PVM.

“In a nutshell, 2021 demonstrated that the war on the coronavirus is a viable one, even if the road to victory is paved with unexpected twists and turns.”

Many American schools that would normally welcome students back to classrooms on Monday are postponing their start dates, trying to test students and teachers, and preparing, as a last resort, to return to distance learning as records of COVID-19 cases from the Omicron variant sweeps all over the world. country. read more

Oil received some support from a power outage in Libya. Oil production will be reduced by 200,000 barrels per day for a week due to maintenance of the pipeline.

Last year, Brent rose 50%, spurred on by global recovery from the COVID-19 pandemic and OPEC + supply cuts, even though infections reached record highs worldwide. read more

Some see more gains in 20222.

“Crude oil and oil product prices should benefit from oil demand moving above 2019 levels,” said a report by UBS analysts including Giovanni Staunovo. “We expect Brent to rise to a range of $ 80-90 by 2022.”

Additional reporting by Mohi Narayan and Naveen Thukral Editing by Jason Neely and Mark Potter

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