Oil prices stable as positive COVID news balances curbs

A truck passes pumpjacks in the Belridge oil field on November 03, 2021 near McKittrick, California.
Mario Tama | Getty Images News | Getty Images

Oil prices were broadly stable on Thursday as signs that the worst effects of the Omicron variant might be more containable than previously feared were countered by new COVID-19 restrictions amid surging infections.

Brent crude futures advanced 2.07%, or $1.56, to $76.85 per barrel, after a 1.8% gain in the previous session. U.S. West Texas Intermediate (WTI) crude futures settled $1.03, or 1.4%, higher at $73.79 a barrel after jumping 2.3% in the previous session.

"Oil's direction is entirely reliant on Omicron headlines, and as long as they stay more contagious but less virulent, oil's rally is likely to continue, with intra-day ranges exacerbated by thin liquidity," said OANDA market analyst Jeffrey Halley.

Both contracts are set for a third straight day of gains. So far this year, Brent has risen around 46% and WTI 50%.

The big gains on Wednesday were partly spurred by a larger-than-expected drawdown in U.S. crude stockpiles last week.

The United States authorized Pfizer Inc's antiviral COVID-19 pill for people aged 12 and older, the first oral and at-home treatment as well as a new tool against the fast-spreading Omicron variant.

Meanwhile, AstraZeneca said a three-dose course of its COVID-19 vaccine was effective against Omicron, citing data from an Oxford University lab study.

On the flip side, governments reimposed a range of restrictions to slow the spread of Omicron.

The Chinese city of Xian on Wednesday ordered its 13 million residents to stay home, while Scotland imposed gathering limits from Dec. 26 for up to three weeks, and two Australian states reimposed mask mandates.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and allies have left the door open to reviewing their plan to add 400,000 barrels per day of supply in January.