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Iraq's oil minister Ihsan Abdul-Jabbar expects crude oil to recover to $75 per barrel, Reuters has reported, citing an interview of Abdul-Jabbar for Iraqi state TV.
Shortly after the comment, oil prices rose, and are trading at $75 for Brent and over $71 for West Texas Intermediate. This, after both benchmarks slumped by over $10 in one day following the news of a new coronavirus variant last week.
OPEC is trying to "control the energy market, in a positive way," the top Baghdad official said, adding that the current price level of oil was not high enough for producers.
Oil, meanwhile, has recouped a lot of the losses suffered last week, rising more than 4 percent today in Asian trade as reports multiplied from medical experts that the Omicron variant may not be as scary as Delta, with symptoms tending to be mild.
"It does not look like there's a great degree of severity," Washington's Dr. Anthony Fauci said after South African researchers confirmed their patients with Omicron are having symptoms mild enough to not require hospitalization.
Of course, experts are making a point of warning it is still early days—and things can change—but the market seems to have calmed down for the time being, no longer expecting a wave of new lockdowns that could destroy oil demand again.
An additional factor that contributed to the return of bullishness among oil traders was the breakdown in Iran nuclear talks in Vienna after Tehran stunned Western European negotiators with a whole new set of demands that would require the complete redoing of a draft agreement negotiated by the previous Iranian government.
"While negotiations could still find success when they recommence later this week, markets may need to consider a more prolonged delay to Iranian oil exports," said a Commonwealth Bank of Australia analyst as quoted by Reuters.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com