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Oil prices gain even as uncertainty on Omicron lingers

By Fitri Wulandari

04:15, 1 December 2021

North Sea oil rig
OPEC and its allies is slated to meet on Thursday to discuss monthly output - Photo: Alamy

Crude oil prices recouped previous day’s losses on Wednesday amid risk uncertainty from the spread of Omicron on oil demand and Organization of Petroleum Exporting Countries’s (OPEC) output decision from Thursday’s meeting.

International benchmark Brent crude oil futures climbed 2.25% to $70.79 per barrel in Asia trading hour, while West Texas Intermediate rose 2.02% at $67.52/bbl.

Brent dropped nearly 5% on Tuesday after US Federal Reserve’s (Fed) chairman Jerome Powell hinted it will end its asset purchase programme earlier than planned. The US central bank could then start raising interest rates from their current lows.

Interest rate hike

The Fed’s started reducing the $120bn a month asset purchase programme weeks ago by approximately $15bn. It means the Fed will cease to buy bonds by June 2022.

“This (Powell’s stement) saw a risk-off tone across markets,” said analysts at ANZ Group in a note on Wednesday.


23.02 Price
-3.350% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee 0.0122%
Overnight fee time 22:00 (UTC)
Spread 0.020

Oil - Crude

71.41 Price
+2.320% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.030

Natural Gas

2.52 Price
-0.450% 1D Chg, %
Long position overnight fee 0.0718%
Short position overnight fee -0.0937%
Overnight fee time 22:00 (UTC)
Spread 0.0050


2,004.85 Price
-1.180% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 22:00 (UTC)
Spread 0.50

Higher interest rates could increase consumers’ costs which means people may spend less money on travelling, leading to lower demand for oil.

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Signs of Omicron impacts

The statement came amid the spread of the Covid-19 Omicron variant and as the OPEC and its allies is slated to meet on Thursday to discuss monthly output.

The market continues to look for signs of any impact of Omicron on oil demand, the analysts said.

“Most vaccine providers suggested new shots may be needed, although development time would be quick,” they said.

Read more: Oil prices fall further on Covid-19 vaccine uncertainty

Markets in this article

Oil - Brent
Brent Oil
75.983 USD
1.511 +2.030%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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