WTI bulls eye $76.00 as OPEC+ sees mild, short-lived impact of Omicron on oil market

• WTI begins 2022 on a firmer footing, refrains from extending Friday’s losses.
• OPEC+ JTC report tries to placate Omicron fears, global cases soar.
• Market sentiment stays firmer during the first day of 2022, off in multiple bourses test bulls.
• Final readings of US PMI for December will direct intraday moves, US NFP, OPEC+ meeting will be the key.

WTI crude oil prices rise towards $76.00, up 0.55% near $75.70 during the mid-Asian session on Monday. In doing so, the black gold takes clues from upbeat market sentiment and hawkish comments from OPEC+ (an alliance of Russia and OPEC (Organization of the Petroleum Exporting Countries)).

Reuters cites OPEC+ report that said, “The impact of the new Omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges.” The news also mentioned that the OPEC+ base scenario sees OECD oil stocks next year staying below the 2015-2019 average until Q4. It’s worth noting that the OPEC+ is up for a Joint Technical Committee (JTC) meeting on Tuesday.

Ahead of the meet, Bloomberg survey says, “The 23-nation alliance led by Saudi Arabia and Russia is likely to proceed with another modest monthly hike of 400,000 barrels a day as it restores production halted during the pandemic.”

Elsewhere, the virus cases remain high in the West but the policymakers are trying to keep markets positive while citing the scientific studies terming the South African covid variant, namely Omicron, as less severe. Even so, Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases said, per CNN, “When you have so many, many cases, even if the rate of hospitalization is lower with Omicron than it is with Delta, there's still the danger that you're going to have a surging of hospitalizations that might stress the health care system.”

Amid these plays, S&P 500 Futures print 0.35% intraday gains while the off in Japan restricts bond moves in Asia.

Looking forward, an absence of major market players may restrict oil prices today. However, final readings of the US Markit Manufacturing PMI for December may offer intermediate clues to the oil prices.

Technical analysis

Although the 100-DMA restricts the short-term downside of WTI crude oil to around $74.40, the last Thursday’s Doji keeps sellers hopeful until the quote breaks the $77.25 level.