Oil prices swing as easing supply issues wrestle strong demand

Oil fluctuated after recording the biggest weekly gain in a month as supplies returned in Kazakhstan while production in Libya remained volatile.

Brent crude rose to trade near $82 a barrel after earlier swinging between gains and losses. Libyan production increased to 900,000 barrels a day after pipeline maintenance was completed, although some of its ports could be closed for the next week due to bad weather. Some output was restored in Kazakhstan following widespread unrest.

For the time being, demand has held up well against the spread of omicron across the globe and speculators have boosted their net-bullish bets on the global Brent benchmark to a six-week high as a result. 

Traders are focused on China, however, which is continuing to battle outbreaks of the virus. The world’s largest oil importer ignited a mass testing blitz in the northern port city of Tianjin as the country strives to maintain its zero-tolerance approach to Covid-19 in the face of more transmissible variants. “Crude oil trades steady with focus on robust demand and so far a limited fallout from the omicron surge,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S.