Brent oil futures inched up 0.15% to $86.19 and crude oil WTI futures climbed 0.34% to $83.58
Oil was up on Monday morning in Asia, with investors expecting a tighter output from major producers. However, global fuel demand remained unperturbed by the omicron COVID-19 variant.
Brent oil futures inched up 0.15% to $86.19 by 3:47 AM GMT and crude oil WTI (West Texas Intermediate) futures climbed 0.34% to $83.58. Both Brent and WTI futures built on their gains from the previous week.
Some investors expect easing concerns that omicron could dent demand, as well as tighter output, may push oil to multiyear highs.
The bullish sentiment is continuing as the Organization of the Petroleum Exporting Countries and allies (OPEC+) is not providing enough supply to meet strong global demand, Fujitomi Securities Co Ltd. analyst Toshitaka Tazawa told Reuters.
If investment funds increase allocation weight for crude, prices could reach their highs of 2014, he added.
OPEC+ decided to add oil supply for February at its last meeting on January 4, 2022, but many investors are cautious that smaller producers cannot meet the agreed output while other producers are cautious about pumping too much oil over concerns that COVID-19 outbreaks might impact demand.
Meanwhile, continuing tensions between U.S. and OPEC+ member Russia over Ukraine also lent support to oil. Russia has amassed 100,000 troops on Ukraine’s border, and any armed conflict could impact Russia’s oil output.
To prepare for this potential conflict, the U.S. held talks on contingency plans for supplying natural gas to Europe with several international energy companies, according to Reuters.
In Asia Pacific, supply is also a concern. China plans to release oil reserves around the Lunar New Year holidays as part of the coordinated release plan led by the U.S.