SINGAPORE Reuters -- Oil prices went up on Tuesday after a near 5% rebound the day before, as concerns about the impact of Omicron variant on global fuel demand eased while Iran's nuclear talks hit roadblocks, delaying the return of Iranian crude supplies.
After settling 4.6% higher on Monday, Brent crude futures rose 34 cents, or 0.5%, to $73.42 a barrel at 0124 GMT. U.S. West Texas Intermediate crude was up 43 cents, or 0.6%, building on a 4.9% gain in the previous session.
Oil prices were pummelled last week over concerns that vaccines might be less effective against the new coronavirus variant Omicron, sparking fears that governments may impose restrictions to curb its spread and affect global growth and oil demand.
A South African health official reported over the weekend that Omicron cases there had only shown mild symptoms. Anthony Fauci, the top U.S. infectious disease official, told CNN that there doesn't seem like there's a great degree of severity so far.
The risk of the worst case scenario in the oil markets over the past couple of weeks has been reduced by this, according to ANZ analysts.
In a sign of confidence in oil demand, the world's top exporter of Saudi Arabia raised monthly crude prices on Sunday. This comes after the Organization of the Petroleum Exporting Countries and their allies agreed to increase output by 400,000 barrels per day in January despite the release of U.S. strategic petroleum reserves.
A delay in the return of Iranian oil supported prices. U.S.-Iran nuclear talks have hit roadblocks. Germany urged Iran on Monday to present realistic proposals for talks over its nuclear programme.
While negotiations could still be successful when they occur later this week, markets may need to consider a longer delay to Iranian oil exports, Commonwealth Bank of Australia commodity analyst Vivek Dhar said in a note.
That is positive for oil prices and supports OPEC plans to boost oil production through 2022. Iraq has expressed optimism over demand and higher prices, while global oil and gas executives warned of underinvestment and the need for fossil fuels despite a push for cleaner energy.
It appears that the major oil price selloff is over as the mid $60 s has provided strong support and has been accompanied by a steady reminder that the oil market will be vulnerable to shortfalls over the next couple of years, OANDA analyst Edward Moya said in a note.