01.12.202109:33:00UTC+00Oil Rebounds Ahead Of OPEC Meeting

Oil prices clawed back some losses on Wednesday, after having fallen sharply the previous day amid fresh concerns about the outlook for oil demand.

Brent crude futures for February delivery surged 4.5 percent to $72.32 a barrel, while WTI crude futures for January settlement were up 4.3 percent at $69.02 a barrel.

Risk sentiment improved slightly amid easing concerns about the new Covid-19 variant and ahead of an OPEC meeting where major producers will discuss how to respond to the threat of a hit to fuel demand from the Omicron variant.

It is almost certain that OPEC and its allies will move to pause their planned oil production increases so as to assess the impact of omicron more fully on the world economy.

Drugmaker Moderna's chief executive said on Tuesday that existing vaccines could be much less effective at tackling Omicron Covid variant than earlier strains and that it would take months before pharmaceutical companies can manufacture new variant-specific jabs at scale.

With several countries reporting cases of the new variant, it looks more countries are likely to impose stricter movement restrictions to curb the spread of the virus.

The possibility of border closures to curb the spread of the infection is likely to result in a significant drop in demand for jet fuel.