Higher, But Off Best Levels

WTI & Brent futures are off of best levels, with e-minis edging lower on the back of negative reports re: the capability of omicron when it comes to evading antibodies. Still, the benchmarks trade ~$0.60 higher on the day, with that particular source of worry providing little in the way of fresh, meaningful information when it comes to the newest COVID strain.

• The earlier pop higher didn’t have anything in the way of overt headline drivers. Bulls have forced WTI & Brent above $73 & $76 respectively. The benchmarks recouped ~$11/bbl in the rally from last week’s lows to Asia session highs, with broader omicron fear fading, providing more faith in medium-term oil demand outlooks. From a technical perspective, the 50-day EMAs in both contracts provide the next real target for bulls, after the benchmarks extended through their previous week-to-date peaks on the run higher in Asia-Pac trade (which pointed to a technical/flow-driven move, given the lack of headline flow).
• Matters re: Iran will garner interest in the coming days, with the U.S. Special Envoy for Iran set to travel to Vienna over the coming weekend. He will meet with world powers re: reviving Iran's 2015 nuclear deal.