By Gina Lee
Investing.com - Oil prices slipped on the last day of 2021 but is set to post its biggest annual gains in 12 years. This is driven by a mix of global economic recovery and producer restraint, even as COVID-19 infections reached record highs around the world.
Brent oil futures slipped by 0.54% to $78.58 by 9:35 PM ET (2:35 AM GMT) and crude oil WTI futures fell 1.17% to $76.09.
In addition, Brent crude futures is on track to end the year up 53%, while U.S. crude futures is on for a 57% gain. It marks the strongest performance for these two benchmark contracts since 2009, when prices soared more than 70%.
"We've had Delta and Omicron and all manner of lockdowns and travel restrictions, but demand for oil has remained relatively firm. You can attribute that to the effects of stimulus supporting demand and restrictions on supply," said CommSec Chief Economist Craig James.
Today's slip in prices comes after a rise that went on for several straight days. Soaring COVID-19 cases on new year's eve reached new highs across the world, from Australia to the U.S., caused by the highly infectious Omicron coronavirus variant.
U.S. health experts have told Americans to brace for severe disruptions in the near future, as infection rates are likely to worsen amid increased holiday travel, New Year celebrations and school reopenings.
James expects the Organization of the Petroleum Exporting Countries, Russia and allies (OPEC+) to stick to its plan to add 400,000 barrels per day of supply each month. The alliance will meet on Jan. 4, as they continue to wind back sharp production cuts implemented in 2020.
"I think we will see a lot of pressure on OPEC+ to make sure there's enough oil being supplied to market," James said.