Oil and Gold prices are up
Oil was up in Asia on Tuesday morning, continuing its recovery from last week’s drop. Due to the uncertainty surrounding the new Omicron coronavirus variant.
Brent oil futures increased 0.64 percent to $73.69, while WTI futures increased 1.03 percent to $70.67. Last Friday, oil fell around 12% on fears that the Omicron variant would lead to more lockdowns and reduce fuel demand.
On Monday, the World Health Organization declared Omicron a variant of concern, indicating a very high risk of infection surges. Over the weekend, several countries, including the Netherlands, Denmark, and Australia, reported Omicron cases, and other countries imposed travel restrictions. Because of Omicron, investors expect the Organization of Petroleum Exporting Countries and their Allies (OPEC+) to pause plans to add 400,000 barrels per day (BPD) of supply in January. On December 2, the cartel will meet to discuss the collection.
The United States and other major consumers announced a smaller-than-expected coordinated release from the Strategic Petroleum Reserve the previous week. However, OPEC+ was already reconsidering its plan.
OPEC+ can easily justify a halt or even a slight reduction in output after releasing global strategic reserves and announcing dozens of countries restricting travel to and from South Africa and neighboring countries.
In other news, world powers and Iran resumed talks on reviving a 2015 nuclear agreement. There were positive comments from diplomats boosting the market.
Investors are now looking forward to the American Petroleum Institute’s report on crude oil supply in the United States. The report should come later in the day.
Investors remained cautious about the impact of the Omicron COVID-19 variant on the global economic recovery. Hence, gold was up in Asia on Tuesday morning.
The yellow metal futures were up 0.29 percent at $1,790.30 per ounce.
Omicron has already caused some countries to close their borders, putting the economic recovery in jeopardy.
On Monday, US Federal Reserve Chairman Jerome Powell stated that he still expects inflation to fall by 2022 as supply and demand become more balanced. The recent increase in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.
Silver was unchanged at $22.88 per ounce, while platinum and palladium were up 0.4 percent. Nornickel, Russia’s largest palladium producer, increased its investment forecast for 2021-2030 to $35 billion. Nornickel will be able to upgrade its production infrastructure and improve its long-term outlook for PGM output as a result of this.
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