The United States may release more strategic reserves, and oil gains narrowed, and the intraday rebound was as high as 6%

On Monday (November 29), U.
S.
oil futures rose 2.
6% to settle at $69.
95 per barrel
.
Traders weighed the impact of the Omicron strain on oil demand and OPEC's possible reaction to the U.
S.
statement that it would release more crude reserves if necessary, paring gains
.

Amos Hochstein, senior adviser to global energy security at the U.
S.
State Department, said the Biden administration may release more oil
from the Strategic Petroleum Reserve if necessary.
Most releases are done through exchange and are therefore replenished
.
I think we want to take action that has an impact on the market, but also the ability and flexibility to allow us to do that again when the U.
S.
economy needs it
.

Oil prices plunged more than 10% on Friday (Nov.
26), their biggest one-day drop since April 2020, reflecting fears that pandemic-related travel bans will hit demand
.
The drop in liquidity caused by the US holiday amplified the decline in oil prices
.
Michael Tran, an analyst at RBC Capital Markets, said we think the drop in oil prices was excessive
.
The sharp drop in oil prices suggests that demand levels are much
weaker than currently being seen.

If the Omicron variant proves vaccine resistant or more contagious than other variants, it could affect travel, commerce and oil demand
.
The World Health Organization (WHO) says it could take weeks to understand the severity of the variant, but a South African doctor who has treated a confirmed case says symptoms appear mild so far
.
At the same time, US President Joe Biden urged Americans not to panic about the Omicron variant of the new coronavirus, saying that the United States is working with pharmaceutical companies and will develop contingency plans
if new vaccines are needed to stop the spread of this variant.

Russia and Saudi Arabia signaled on Monday that OPEC+, a group of OPEC and oil-producing allies, did not need to rush to adjust oil output policies
this week.
Saudi Energy Minister Prince Abdulaziz said Monday that he was not worried about the Omicron variant
.
OPEC+ postponed two committee meetings scheduled for Monday and Tuesday until later this week to buy time to assess
the new Omicron variant of the coronavirus.

Russian Deputy Prime Minister Alexander Novak said there was no need for urgent action against the oil market over Omicron, downplaying the possibility of a change to the
OPEC+ oil supply deal this week.

Assuming Brent oil prices are around $75, Citi expects OPEC+ to continue its policy
of increasing production by 400,000 per barrel in January at Thursday's meeting, Citi analyst Ed Morse wrote in the report.
Calculations show that OPEC+ is actually increasing production by 262,000 b/d per month, not 400,000 b/d, because some OPEC+ producers cannot afford to do so
.
This means that in the global oil supply and demand balance, withholding these increases is basically meaningless
.
Volatility in the winter and long-term crude oil markets is expected to increase this winter, impacted by the pandemic, the release of strategic reserves and OPEC+
.
It is expected that the first half of 2022 will shift from a decrease in inventories to a large increase
in inventories.