Oil prices were on track for their biggest weekly gain since late August, with market sentiment buoyed by easing concerns over the Omicron coronavirus variant’s impact on global economic growth and fuel demand.

Brent and WTI benchmarks were both on course for gains of about 8% this week, their first weekly gain in seven weeks, even after a brief bout of profit-taking.

Brent crude futures were up $0.99, or 1.3%, at $75.41 a barrel by 1351 GMT after falling 1.9% on Thursday.

US West Texas Intermediate (WTI) crude futures rose $1.08, or 1.5%, to $72.02 after sliding 2% in a volatile session the previous day.

US consumer prices rose further in November to produce the largest year-on-year rise since 1982, government data showed on Friday, adding to bullish sentiment on oil demand.

Earlier in the week, the oil market had recovered about half the losses suffered since the Omicron outbreak on November 25, with prices lifted by early studies suggesting that three doses of Pfizer’s Covid-19 vaccine offers protection against the Omicron variant.

“The oil market has thus rightly priced out the ‘worst-case scenario’ again, but it would be well advised to leave a certain residual risk to oil demand in place,” said Commerzbank analyst Carsten Fritsch.

Keeping a lid on prices is faltering domestic air traffic in China, owing to tighter travel restrictions, and weaker consumer confidence after repeated small outbreaks.

Meanwhile, ratings agency Fitch downgraded property developers China Evergrande Group and Kaisa Group, saying they had defaulted on offshore bonds.

That reinforced fears of a potential slowdown in China’s property sector, as well as the broader economy of the world’s biggest oil importer.

Published in The Express Tribune, December 11th, 2021.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.