Sonali Paul

MELBOURNE (Reuters – The third day of rising oil prices was supported by a stronger dollar that reflects optimism about global economic growth. Meanwhile, European and Australian governments are stepping up their efforts to curb the spread Omicron coronavirus.

U.S. West Texas Intermediate’s crude futures gained 0.5% or 35 Cents to $73.11/barrel at 0244 GMT, after rising 2.3% during the previous session.

Futures gained 40 cents (or 0.5%) to $75.69/barrel, which is 1.8% more than the previous session.

Partly due to a bigger-than-expected drawdown of stockpiles last Wednesday, the big gains on Wednesday are partly attributed to that.

Oil markets are buoyed by a weaker U.S. Dollar. This makes commodities more affordable for holders of other currencies. Following data that showed U.S. consumers confidence increasing more than was expected during December, the dollar fell close to its one-week lowest.

Oil has risen even though governments have imposed restrictions to stop Omicron’s spread. Wednesday’s order by Xian, a Chinese city, was to keep its 13,000,000 residents home. Scotland imposed gathering limitations from Dec. 26, for up to 3 weeks. Mask mandates were reimposed in two Australian states as the number of cases rose.

The potential effect of restrictions on mobility on fuel demand has been ignored by the market. However, the Organization of the Petroleum Exporting Countries, Russia, and its allies (also called OPEC+), have left the door open for a review of their January plan to increase supply by 400,000 barrels daily.

Edward Moya from OANDA stated that although the Omicron version could lead to additional restrictive measures in Europe and Asia, however prices won’t fall because OPEC+ is able to easily adjust their production levels,” in a note.