Oil hits $75 as U.S. demand and Fed outweigh virus concern
Oil nudged above $75 a barrel on Thursday, supported by record U.S. implied demand and falling crude stockpiles, even as the spread of the Omicron coronavirus variant threatens to put a brake on consumption globally.
Crude and other risk assets such as equities also got a boost after the U.S. Federal Reserve gave an upbeat economic outlook, which lifted investor spirits even as the Fed flagged a long-awaited end to its monetary stimulus.
Brent crude futures gained $1.14, or 1.5%, to settle at $75.02 per barrel. West Texas Intermediate crude futures rose $1.51, or 2.13%, to settle at $72.38 per barrel.
Demand has been rising in 2021 after last year’s collapse, and the U.S. Energy Information Administration (EIA) on Wednesday said product supplied by refineries, a proxy for demand, surged in the latest week to 23.2 million barrels per day (bpd).
Worries about the virus and the prospect of a supply surplus next year, as flagged by the International Energy Agency in its monthly report this week, limited gains.
Britain and South Africa reported record daily COVID-19 cases while many firms across the globe asked employees to work from home, which could limit demand going forward.
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