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Oil prices jump amid demand hopes

New York, U.S. | Xinhua | Oil prices surged on Tuesday as investors bet on robust global demand despite the spread of the Omicron variant.

The West Texas Intermediate for February delivery added 2.99 U.S. dollars, or 3.8 percent, to settle at 81.22 dollars a barrel on the New York Mercantile Exchange. Brent crude for March delivery increased 2.85 dollars, or 3.5 percent, to close at 83.72 dollars a barrel on the London ICE Futures Exchange.

The rally came after the U.S. Energy Information Administration (EIA) said Tuesday in its Short-Term Energy Outlook that it expected global oil demand to grow by 3.6 million barrels per day in 2022, higher than last month’s estimate.

Meanwhile, the EIA noted there are multiple factors that could keep oil prices volatile.

“Oil market balances are subject to significant uncertainties during the forecast period, notably, the way in which the ongoing pandemic affects economic growth, oil demand, and the production decisions of OPEC+ members,” it said.

Weekly data on U.S. petroleum supplies from the EIA is slated for Wednesday. Analysts polled by S&P Global Platts forecast a decline of 1.6 million barrels in U.S. crude supplies for the week ending Jan. 7.

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Xinhua

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