Oil Prices Rises Despite Increase in COVID-19 Variant

Global oil prices reversed losses to extend bullish run slightly on Tuesday as demand recovery overshadowed the outbreak of highly contagious Delta variant COVID-19.

Brent crude oil, against which Nigerian oil is priced, gained 26 cents or 0.4 percent to $74.94 a barrel on Tuesday morning after dropping 2 percent on Monday.

U.S West Texas Intermediate crude oil gained 24 cents or 0.3 percent to $73.15 a barrel, up fro, 1.5 percent decline posted on Monday.

“From a global perspective, there are seemingly growing concerns over the increase in the COVID-19 Delta variant,” StoneX analyst Kevin Solomon said.

“The market has grown relatively immune to COVID-19 developments, but if lockdowns occur in larger demand centres in Asia, we may see the market’s nonchalance abate.”

Spain and Portugal, favourite summer holiday destinations for Europeans, imposed new restrictions on unvaccinated Britons on Monday, while 80% of Australians faced tighter curbs due to flare-ups of the virus across the country.

Still, the market expects new COVID-19 vaccine rollouts to boost the demand outlook, experts stated.

“The narrative of the past few months has not changed: the war against the virus is being gradually won, the global economy and oil demand are recovering,” said PVM Oil analyst Tamas Varga.

“Oil supply is being effectively managed therefore dips are probably viewed by ardent bulls as attractive buying opportunities.”