By Gina Lee
Investing.com – Oil was up Monday morning in Asia, clawing back some of Friday’s losses. Investors went bargain hunting, but caution still remained over the discovery of the new omicron COVID-19 variant and the re-start of the Iran nuclear deal negotiation.
Brent oil futures rose 4.62% to $74.90 by 10:23 PM ET (3:23 AM GMT) and WTI futures jumped 5.24% to $71.72. The black liquid fell by more than 10% on Friday, its largest one-day drop since April 2020, due to concerns about the new variant and a potentially big supply surplus in the first quarter of 2022.
The World Health Organization said it was not yet clear whether omicron is more transmissible or dangerous than other variants, but classified it as a "variant of concern. Countries including the Netherlands, Denmark, and Australia reported omicron cases over the weekend.
OPEC+ also pushed back its joint ministerial monitoring committee to Thursday from Tuesday, reportedly in order to have more time to assess the impact of the omicron variant on oil demand and prices. The OPEC and broader OPEC+ meetings will take place as scheduled on Wednesday and Thursday, where the cartel will decide on whether to go ahead with its plan to increase output by 400,000 barrels per day in January 2022 and beyond.
Some investors have called for a pause in these increases after the U.S. led a coordinated release from the Strategic Petroleum Reserve last week, as well as omicron’s potential impact on fuel demand.
"There was correction buying on views that the oil market had been oversold last week and on speculations that OPEC+ may take a measure against omicron, potentially cutting output," Nissan Securities general manager of research Hiroyuki Kikukawa told Reuters.
"All eyes will be on how omicron will affect global economy and fuel demand, Organization of the Petroleum Exporting Countries and its allies (OPEC+) action and Iran nuclear talks this week," he added.
Meanwhile, Iran and world powers will resume talks on reviving the 2015 Iran nuclear deal in Vienna later in the day.