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Oil rebounds to $76 on speculation Omicron-related drop overdone

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LONDON — Oil rebounded by almost 5% on Monday to $76 a barrel as some investors viewed Friday’s slump in oil and financial markets on concern about the Omicron coronavirus variant as overdone.

The World Health Organisation has said it could take weeks to understand the variant’s severity, although a South African doctor who has treated cases said symptoms so far seemed to be mild.

Brent crude was $3.24, or 4.5%, higher at $75.96 by 1047 GMT, after sliding $9.50 on Friday. U.S. West Texas Intermediate (WTI) crude was up $3.12, or 4.6%, at $71.27, having tumbled $10.24 in the previous session.

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“We saw some correction as Friday’s plunge in oil prices has been overdone,” said Tatsufumi Okoshi, senior economist at Nomura Securities.

Friday’s slide, the biggest one-day drop since April 2020, reflected fears that travel bans would hammer fuel demand. The plunge was exacerbated by low liquidity due to a U.S. holiday, as demand fears did not justify such a fall, analysts said.

“The fear factor had its grip on financial markets on Friday,” said Norbert Ruecker of Swiss bank Julius Baer. “Fundamentally, the announced and enacted international air travel constraints cannot explain such a sharp slump.”

A semblance of calm also returned to the financial markets on Monday as investors waited for more details of the variant. European shares rebounded, while safe haven bonds lost ground.

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“I can’t help but feel that Friday’s lows were probably the bargain of the year if you were an oil buyer, speculative or physical,” said Jeffrey Halley of brokerage OANDA.

Japan said on Monday it would close its borders to foreigners, as the world’s third-largest economy joined Israel in taking the toughest measures against the variant.

The emergence of Omicron has created a new challenge for the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, which meet this week to set policy.

The group has postponed technical meetings this week to gain time to assess Omicron’s impact, but Russia said it sees no need for urgent action on the market, downplaying possibility of changes to the OPEC+ oil deal.

Also on the oil market’s radar this week, talks on reviving the 2015 Iran nuclear accord, that could add to global supply if a deal is reached, are resuming on Monday. (Additional reporting by Yuka Obayashi; Editing by Kirsten Donovan and Edmund Blair)

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Bloomberg names Green ME of finance for Americas

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Rick Green

Rick Green has been named managing editor for finance in the Americas at Bloomberg News, effective July 11.

He is currently senior editor for markets at Bloomberg.

Green was previously a team leader for distressed company news. He was also corporate finance editor and a senior editor on the U.S. finance team.

Before Bloomberg, Green was assistant managing editor for business and technology at Newsday. He also worked at BusinessWeek magazine as a senior editor and at SmartMoney magazine.

 





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Liberty Steel secures time with Greensill as debt rstructuring continues

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Liberty Steel Group has entered a standstill agreement with Greensill Bank.

It pauses all enforcement actions between the South Yorkshire headquartered business and the subsidiary of the collapsed financial institution as it focuses on recovery.

Greensill Bank, part of Greensill Capital, is Liberty’s largest creditor on the business’s debt facilities, provided in 2019.

Read more:£26m British Steel Special Profiles upgrade given the go-ahead

The agreement lasts until October 31, with potential to extend until the end of the year.

Liberty said it will enable the company to develop a longer term sustainable financing structure, with detailed due diligence and information exchange continuing between the two parties.

A Liberty spokesperson said: “Today’s standstill agreement with Greensill Bank demonstrates we are getting close to a consensual debt restructuring that is in the best interests of all our stakeholders.

“We are working intensively towards a settlement with our major creditors in a timeframe which would obviate the need for a legal battle. Our core businesses continue to perform well and are operationally strong despite some economic headwinds.”

HMRC had filed then withdrew a winding up petition for Liberty earlier this year as progress with creditors was made.



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At Close of Business: Jordan Murray talks an Australian republic

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Journalist Jordan Murray discusses revived debate over the possibility of an Australian republic.



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