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Oil Pushes Higher as Traders Weigh Omicron Risks, OPEC+ Meeting


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© Bloomberg. A tanker at the at the BP Plc Cherry Point Refinery near Blaine, Washington, U.S., on Friday, Nov. 19, 2021. Total U.S. oil stockpiles, including commercial inventories of crude and refined products, fell by the most in 11 weeks, dropping by 12.1 million barrels a recent U.S. Energy Information Administration report showed. Photographer: James MacDonald/Bloomberg

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(Bloomberg) — Oil climbed above $70 a barrel as investors weighed a host of risks to the near-term outlook, including the impact of the omicron variant, an upcoming OPEC+ meeting, and a release of crude from U.S. strategic reserves.

West Texas Intermediate was 1.2% higher in Asia, set for a back-to-back daily gain after plunging on Friday amid concern the new coronavirus variant would pummel energy demand. Drugmaker Pfizer Inc. (NYSE:) said it will know within two to three weeks how well its existing vaccine holds up against the new strain.

Oil has sunk about 15% in November, set for the biggest monthly loss since March 2020, when the onset of the pandemic crushed global consumption. Investors are now seeking clues about the challenge posed by omicron, and how producers will respond. The Organization of Petroleum Countries and its allies will decide on Thursday whether to pause a run of monthly supply hikes.

The Biden administration said on Monday that it would proceed with a plan to draw 50 million barrels of oil from strategic reserves despite the recent drop in prices, and it could release even more onto the market. The move was made in coordination with other crude-consuming nations, including Japan.   

Oil traders are also tracking talks this week aimed at reviving Iran’s 2015 nuclear deal with world powers. Success at the negotiations in Vienna could lift sanctions from Iran’s economy, leading to a resumption in official oil flows. The exchanges began positively Monday, according to a top European diplomat.

©2021 Bloomberg L.P.

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