Oil rises amid optimism Omicron's impact will be limited by fuel demand

Oil prices rose on Monday, extending gains from last Friday, boosted by growing optimism that the impact of the Omicron coronavirus variant will be limited to global economic growth and fuel demand.

Brent crude futures were up 53 cents, or 0.7%, to $75.68 a barrel by 01:00 GMT after rising 1% on Friday.

The WTI (US) index rose 69 cents, or 1.0%, to $72.36 a barrel after rising 1% in the previous session.

Both benchmarks posted gains of around 8% last week, their first gain in seven weeks. They made up for more than half of the losses incurred after the Omicron outbreak on November 25.

"Market sentiment has improved as the threat of Omicron variant has diminished," said Sakdah Makok, an analyst at https://fx-exness.com/mt4/.

"WTI is likely to test its recent high of $73.34 and then try to rise to $78, the level before Omicron fears led to a sharp sell-off late last month," he said.

South African scientists see no indication that the Omicron variant is causing a more serious disease, they said on Friday, when officials announced plans to roll out vaccine boosters with daily infection rates approaching record highs.

The COVID-19 shots significantly restore protection against mild disease caused by the Omicron variant, the UK Health Safety Agency said on Friday.

However, investors remained cautious about a co-ordinated release of US-led crude stockpiles by oil-consuming countries, as well as tensions between Russia and Ukraine.

The US Department of Energy said on Friday it would sell 18 million barrels of crude from its Strategic Petroleum Reserve (SPR) on 17 December as part of a previous plan to reduce petrol prices.

On Sunday, the Group of Seven warned in a statement that Russia would face enormous consequences and serious costs if President Vladimir Putin attacks Ukraine.

US intelligence estimates that Russia could be planning an offensive on several fronts in Ukraine as early as next year, involving up to 175,000 troops.

Meanwhile, Iraq's oil minister said on Sunday that he expects the Organisation of Petroleum Exporting Countries (OPEC) to maintain its current policy of gradually increasing supplies by 400,000 bpd each month at its next meeting.