LONDON/BANGALORE/SINGAPORE : Frantic oil buying driven by supply outages and signs the Omicron variant won't be as disruptive as feared has pushed some crude grades to multi-year highs, suggesting the rally in Brent futures could be sustained a while longer, traders said.
Other North Sea grades have also hit one or two year highs. Prices for key west African grades like Nigeria's Bonny Light have jumped too since the start of the year. Several factors have fuelled prices. After the wildfire spread of Omicron in the fourth quarter, oil demand has not been badly hit in a surprise to refiners that had reduced purchases. Now, they suddenly have to make up for the gap.
"Turns out Omicron wasn’t so bad and supply issues were worse than anticipated," a U.S. crude trader said.Inventories have also shrunk in the United States and Canada. The U.S. Energy Information Administration said on Wednesday crude oil stockpiles fell more than expected to their lowest since October 2018.