Oil Prices Rally After Saudi Price Hike

Oil prices rose about 3 percent on Monday after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States.

Brent crude futures for February delivery climbed $1.91, or 2.7 percent, to $71.79 barrel, while U.S. West Texas Intermediate crude for January settlement were up $1.97, or 3 percent, at $68.23.

Both benchmarks declined for a sixth week in a row last week on concerns over new Covid-19 variant Omicron.

On Sunday, Saudi Arabia raised January official selling prices for all crude grades sold to Asia and the United States by up to 80 cents from the previous month after OPEC+ countries surprised traders with a decision to boost crude output.

Aramco's price hike suggests that the state producer was very optimistic about demand despite the spread of the Omicron variant of the coronavirus.

Concerns about the new coronavirus variant eased and the prospect of an imminent rise in Iranian oil exports looked less likely, helping to further underpin investor sentiment.

Early indications of the severity of the Omicron Covid-19 variant are "a bit encouraging," top U.S. pandemic advisor Anthony Fauci said Sunday, adding that it was too early to draw definitive conclusions and more information was still needed.

South Africa reported that Omicron is not leading to higher hospitalization rates despite a jump in active cases.

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