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Oil prices made strong gains on Wednesday in London, making up ground from the previous day's losses as the Organization of the Petroleum Exporting Countries (OPEC) met virtually.
The group converged at 1pm GMT to discuss the potential knock to fuel demand as the world assesses what potential damage the Omicron variant of COVID-19 could do.
Crude (CZ=F) futures prices were up 4.5% in early trade in London, but were still below $70 (£52) a barrel, trading at around $68.53. They closed the day out 3.6% higher.
Futures contracts for Brent Crude (BZ=F) also gained around 3.8% early in the session.
The meeting came ahead of another round of talks with OPEC and its allies on Thursday, which will conclude plans on oil output in the coming months.
OPEC and OPEC+ are meeting (virtually) today and tomorrow -- if you care to know, this is the 11th meeting of the year, which sets a new annual record (surpassing the 7 gatherings of 2003, and beating the 6 meetings of years including 1974 and 1986). #OOTT
— Javier Blas (@JavierBlas) December 1, 2021
Reuters reported that some analysts expect another meeting on Thursday to result in a pause to plans to add 400,000 barrels per day of supply in January, in light of Omicron.
Meanwhile, stocks in Europe were on the front foot following Asia's broadly positive session. The FTSE 100 (^FTSE) gained 1.6% by the close. The DAX (^GDAXI) was up 2.7% and the CAC (^FCHI) was up 2.6%.
The gains come following Markit's manufacturing PMIs, which hit ahead of expectations in several regions in Europe.
"We are in a period of several weeks where the market will be increasingly desperate to find out just how much more infectious Omicron might be and whether it will escape existing vaccines," said AJ Bell investment director Russ Mould.
“A definitive answer will have to wait until mid-December at the earliest it seems, but in the interim stock markets could react violently to hints in either direction.”
On Tuesday, markets took a shock as Federal Reserve chair Jerome Powell said tapering of bond purchases by the central bank could wrap up sooner than expected. He also retired the word "transitory" in relation to inflation — moves which could pave the way for an earlier interest rate hike.
US stocks futures were still pointing higher by the close in London. The S&P 500 (^GSPC) opened 1% in the green and was trading up 1.8% by the close in London. The Dow (^DJI) was also up 1.4% and the Nasdaq (^IXIC) rose 1.6%.
"The market is essentially being held up by its generals – a handful of tech heavyweights," said Marios Hadjikyriacos, senior investment analyst at XM. "There has been a clear rotation to quality lately, with unprofitable ‘growth’ companies and small caps getting blasted while titans like Apple continue to forge ahead, carrying entire indices on their shoulders."
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