Crude Oil Futures Settle Notably Higher As Virus Concerns Fade

Crude oil futures extended gains to a third straight day amid hopes about outlook for energy demand as concerns about Omicron variant of the coronavirus faded a bit.

Separate studies have indicated the new strain poses a lower risk of severe disease and hospitalization than the Delta variant. However, the World Health Organization and some experts have cautioned that it is too early to draw conclusions on the Omicron variant’s severity.

Oil prices had moved higher on Wednesday after data showed a larger than expected drop in U.S. crude inventories in the week ended December 18.

West Texas Intermediate Crude oil futures for February ended higher by $1.03 or about 1.4% at $73.79 a barrel.

Brent crude futures are trading at $76.64 a barrel, gaining $1.36 or 1.81%.

Today is the last trading day of this week. U.S. markets are closed tomorrow in observation of Saturday’s Christmas holiday.

Data released by the Energy Information Administration on Wednesday showed that crude inventories in the U.S. fell by 4.72 million barrels last week, nearly two times the expected drop.

According to a report released by Baker Hughes today, the number of active drilling rigs in the U.S. rose by 7 to 586 this week. Gas rigs rose by 1 in the week.

On the Covid-19 front, Novavax Inc’s Covid-19 vaccine is effective in generating an immune response against the Omicron variant, early data published on Wednesday showed.

Other Covid-19 vaccine manufacturers, including Pfizer Inc. and Moderna Inc., also reported increased immune responses to Omicron.

Moderna CEO Stephane Bancel said earlier this week that the vaccine manufacturer does not expect any problems in developing a booster shot to protect against the Omicron variant.

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