Peter Nurse   

Investing.com — Tuesday’s oil prices were higher as a rise in risk appetite and a reversal of all losses from the previous session saw them settle up. Market participants were warned to expect violent snapbacks because of year-end volatility, the resurgence in Covid cases using Omicron. 

The benchmark U.S. crude oil price, WTI, was up $3.51 or 3.7% at $71.12 per barrel. It fluctuated between $71.53 (session peak) and $68.56 (session low). WTI lost 1.1% in the last week. In mid-October it reached $85.41 for the first time in seven years, and then fell to $70.41.

After a session high at $74.22 and low of $71.24, the London-traded benchmark oil price settled higher by $2.46 or 3.4% at $73.98/barrel. Brent fell 3.3% last week. In mid-October the benchmark global crude oil price was $86.70. This is a record high from 2014.

The news from Tuesday helped to set the tone for the day. Moderna (NASDAQ:) The U.S. drugmaker may develop an Omicron booster shot in just a short amount of time.

Omicron will only need minor changes. Stephane Bancel, CEO of Omicron said that there are no problems and was speaking to TagesAnzeiger on Tuesday.

The sight of European power stations starting their oil-burning engines for the first time since years has boosted optimism. 

This year has seen energy prices spiral, with European gas rising more than 600% due to Russia limiting flows through the major transit route from Germany. This route won’t be fully used until January.

However, these gains could be short-lived as Omicron infections are multiplying rapidly across Europe, the United States and Asia, prompting many countries, particularly across Europe, to consider new restrictions on movement during the financially-important festive period.

JBC Energy analysts stated in a note that “it also seems increasingly likely” that the U.K. would reimpose restrictions after Boxing Day (Dec.26), when daily cases move to record highs.

As the biggest consumer of crude oil in the world, investors are now awaiting U.S. crude supply data from the later in the morning. 

According to the industry body, crude oil stockpiles dropped by 815,000 barrels in the week ending Dec. 10. However, the saw a draw of more than 4.5 million barrels.

Additional reporting by Barani Srikan