Brent Crude Approaches 80 USD as Year Draws to a Close
Yesterday, the main European stock indices all rose, whilst Wall Street ended the day with mixed results. After briefly reaching an all-time high during the session, the S&P 500 ended its record-breaking run, closing the day down by 0.1%.
Today, the UK markets reopen after the Christmas break and, despite record rises in confirmed daily cases of Covid-19, we may see a favourable response to Monday’s news that there will be no further restrictions in England before the new year.
Elsewhere, crude oil prices continued to rise yesterday, despite ongoing concerns regarding the rapid spread of the Omicron variant. In particular, Brent crude seems to have its eye set on $80 a barrel, having previously lost this level after the WHO first designated Omicron as a variant of concern on 26 November.
Brent finished yesterday’s session at $78.94 a barrel, with West Texas Intermediate (WTI) not too far behind at $75.98 a barrel.
Currently supporting these prices are disruptions to oil production in Ecuador, Libya and Nigeria.
Furthermore, the American Petroleum Institute (API) reported yesterday that US crude oil stockpiles fell by 3.1 million barrels last week, although this was slightly less than the anticipated 3.2 million. The official government report on inventory is due later today and, again, is expected to show a fall of around 3.2 million barrels.
Brent crude has risen around 53% so far in 2021 and bulls will be hoping that it breaks the psychological level of $80 a barrel before the year’s end. Looking to the new year, investors await the outcome of the OPEC+ meeting on 4 January, where members will decide whether or not to proceed with a production increase of 400,000 barrels per day in February.
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