Global oil prices continued to gain ground above $80 per barrel on Friday, helped by a growing consensus that demand remained surprisingly resilient to the current Omicron-led wave of COVID-19 cases which spooked markets in late 2021.
Brent crude futures, which traded close to $83 per barrel earlier on Friday, had fully recovered from the end-of-November sell-off over initial omicron fears.
Oil demand markers in most of the world’s biggest oil-consuming countries hit post-pandemic highs by late December, according to Google data, despite initial mobility curbs in many countries to slow the spread of omicron.
The global economy returned to 2019 levels in the second quarter of 2021 and rebounded by 5.7 per cent over the year. At the start of December, S&P Global trimmed its growth outlook for 2022 slightly, down from 4.4 per cent to 4.2 per cent, citing COVID-19 and inflation risks.
But some market watchers were cautiously optimistic that demand would continue to recover strongly, potentially fueling higher prices if oil supplies were unable to keep up.
Damien Courvalin, head of energy research at Goldman Sachs, viewed omicron as a short-term risk to prices, with 2022-23 remaining a “structural bull market” supported by the fact the global economy had become more resilient to the crisis.