Oil rises on Omicron optimism
Crude prices got an early boost after another round of Pfizer vaccine data that allayed fears of lockdowns. Despite all the optimism over vaccine efficacy against Omicron, travel has taken a big hit across Europe and that might not improve until cases decline and governments no longer need to consider new restrictions. Switzerland saw a record high in cases, the UK reported 51,342 new infections and France registered a surge in COVID hospitalizations.
WTI crude did not know how to react to a mixed EIA report. A small draw was accompanied with slightly higher production, limited Omicron impact with gasoline consumption, but softer jet fuel demand and a decline with exports.
Gold remains anchored until the US inflation report on Friday. Gold gave up earlier gains after the highly anticipated Pfizer announcement showed its booster dose gives a high level of protection against the Omicron variant in a new study. The yield curve is steepening as haven bids ease. The short-end of the curve saw the 2-year tentatively reach 0.70% before settling back towards 0.681%.
Gold will shortly be breaking out of its USD1770 to USD 1795 trading range once the latest inflation report tells investors if they should ramp up their hawkish Fed bets.
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