Oil climbs over 2% ahead of OPEC meeting amid omicron Covid variant concerns
Oil prices rose more than 2% on Wednesday, recouping some of the steep losses from the previous session, as major producers prepared to discuss how to respond to the threat of a hit to fuel demand from the Omicron variant.
Brent crude futures rose $1.90, or 2.7%, to $71.13 a barrel at 0504 GMT, after a 3.9% slump on Tuesday.
U.S. West Texas Intermediate (WTI) crude futures rose $1.71, or 2.6%, to $67.89 a barrel, after a 5.4% drop on Tuesday.
The Organization of the Petroleum Exporting Countries (OPEC) will meet on Wednesday after 1300 GMT and ahead of a meeting on Thursday of OPEC+, which groups OPEC with allies including Russia.
While some analysts expect OPEC+ to pause plans to add 400,000 barrels per day of supply in January in light of the potential hit to demand from travel curbs to rein in the spread of the Omicron variant, several OPEC+ ministers have said there was no need to change course.
Yen shines, Aussie sags as Powell turns hawk despite Omicron uncertainty
The safe-haven yen held steady on Wednesday, while the risk-sensitive Australian dollar languished near a one-year low after Federal Reserve Chair Jerome Powell signalled a faster taper of stimulus despite the risks around the Omicron COVID-19 variant.
Investors fear that hasty monetary tightening could choke off the nascent economic recovery, with little still known about Omicron's potential to evade current vaccine protection or how deadly it might be.
The Aussie weakened 0.12% to $0.71245 after dipping as low as $0.7063 of Tuesday for the first time since Nov. 3, 2020. The New Zealand dollar was largely flat at $0.68195 after also touching the lowest since early November of last year at $0.6773 in the previous session.
The greenback ticked 0.09% higher to 113.26 yen, but still within sight of an overnight low of 112.535, a level not seen since Oct. 11.
The index , which measures the dollar against six major peers, traded at 95.921 after sliding to 95.544 on Tuesday for the first time since Nov. 18, weighed down largely by an unwinding of bearish bets on the euro, the most heavily weighted component in the basket.
Westpac recommends buying dips in the index down to the mid-95 level.
The single currency slipped 0.04% to $1.1331, down from a two-week high of $1.1387 overnight.
Sterling traded not far from an 11-month low of $1.31945 reached overnight, last changing hands at $1.32955.
Reference: Reuters, CNBC
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