Oil prices post their biggest weekly increase since August

The general view shows the Cadereyta refinery of the Mexican state oil company Pemex, in Cadereyta, on the outskirts of Monterrey, Mexico, on April 20, 2020. REUTERS / Daniel Becerril / File Photo

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  • Brent and WTI post biggest gains in 15 weeks
  • China’s domestic air traffic recovery falters
  • Rating agency downgrades two Chinese real estate companies

NEW YORK, Dec. 10 (Reuters) – Oil prices edged up on Friday and posted their biggest weekly gain since late August, as market sentiment was supported by appeasing concerns about the impact of the coronavirus variant Omicron on global economic growth and fuel demand.

The benchmarks for Brent crude and US West Texas Intermediate (WTI) each posted gains of around 8% this week, their first weekly gain in seven, even after a brief profit take.

Brent futures were up 73 cents, or 1%, to $ 75.15 a barrel, after falling 1.9% on Thursday.

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WTI rose 73 cents, or 1%, to $ 71.67 after slipping 2% in a volatile session the day before.

“Oil traders are emerging from their shells and feeling more optimistic as they recalibrate their demand expectations in the wake of the Omicron change in the coronavirus,” said Phil Flynn, senior analyst at the Chicago Price Futures Group .

Consumer prices in the United States rose again in November to produce the largest year-over-year increase since 1982, government data showed, bolstering bullish sentiment on oil demand. Read more

Earlier in the week, the oil market had recouped about half of the losses suffered since the Omicron outbreak on November 25, as prices rose by early studies suggesting that three doses of Pfizer’s COVID-19 vaccine (PFE. N) offer protection against the Omicron variant.

The oil market has therefore rightly assessed the ‘worst case scenario’ again, but it would be wise to leave some residual risk in place for oil demand,” said Carsten Fritsch, analyst at Commerzbank.

Price controls are rocking domestic air traffic in China, amid tighter travel restrictions and lower consumer confidence after repeated small outbreaks. Read more

Rating agency Fitch downgraded property developers China Evergrande Group and Kaisa Group, saying they had defaulted on offshore bonds. Read more

This has heightened fears of a potential slowdown in China’s real estate sector, as well as the broader economy of the world’s largest oil importer.

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Additional reporting by and Shadia Nasralla in London, Sonali Paul in Melbourne and Muyu Xu in Beijing Editing by David Goodman and Edmund Klamann

Our Standards: Thomson Reuters Trust Principles.

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