WTI crude oil is starting the brand new trading week on an upbeat note, extending gains from the previous session powered by optimism that the Omicron variant could not have a considerable economic impact or dent oil demand globally. At the time of writing, WTI crude oil is trading at around $72.59 per barrel.

During the previous session, WTI oil strengthened by 1% and posted a weekly gain of around 8%, recovering more than 50% of losses suffered since the Omicron variant was confirmed in late November. The market sentiment has bounced back, bringing buyers back to the commodity after health experts played down the severity of the latest COVID-19 variant.

Even though South Africa has reported record high COVID-19 cases owing to the spread of the latest variant, experts insist that the severity of the illness has not increased. The nation where this variant was first discovered is now planning to administer booster vaccines to contain the spread of infection, a move already being undertaken by several leading economies around the world.

However, despite the optimism in global markets, gains in crude oil remain limited as traders wait to assess the impact of the US releasing SPRs later this week. The Department of Energy confirmed that it will sell 18 million barrels of oil from its SPRs on December 17, which could ease the tightness in supply and put some downward pressure on oil prices this week.

In addition to the pandemic and the US’s planned release of SPRs, crude oil could experience some volatility over geopolitical tensions. G7 nations are closely monitoring the possibility of Russia striking Ukraine soon, a development which could further strain Russian’s relations with the US and other G7 nations, and support oil prices.