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Oil prices rally as Omicron concerns ease

New York, U.S. | Xinhua | Oil prices rose on Tuesday, extending the gains they had scored in the prior session, as fears over the COVID-19 Omicron variant retreated.

The West Texas Intermediate for January delivery added 2.56 U.S. dollars, or 3.7 percent, to settle at 72.05 dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery increased 2.36 dollars, or 3.2 percent, to close at 75.44 dollars a barrel on the London ICE Futures Exchange.

On Monday, the U.S. crude benchmark and Brent jumped 4.9 percent and 4.6 percent, respectively.

“The most serious concerns about the Omicron variant of coronavirus, which had triggered the price slide, have evaporated for the time being,” Carsten Fritsch, energy analyst at Commerzbank Research, said Tuesday in a note.

“The disease appears to be milder than with the previously dominant Alpha variant. If this is confirmed, the effects on oil demand are likely to be far less severe than suggested by the dramatic collapse in price,” he noted.

Meanwhile, traders continued to digest major oil producers’ decision on output.

Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, pledged to stick to the current plan to increase oil production by 400,000 barrels per day next month.

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Xinhua

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