Oil rose in tandem with equity markets as investors weighed the rapid spread of omicron against signs it may be milder than previous variants.

West Texas Intermediate futures closed 2.4% higher on Monday, trading above $75 a barrel for the first time in a month amid a light volume session. Daily omicron infections in the U.S. surpassed those in the delta wave, while China posted the highest number of cases since January. Thousands of flight cancellations in the U.S. stemming from airline-employee illnesses were a reminder that the more infectious Covid variant could still wreak havoc.

Despite the omicron spread and airline cancellations, mobility numbers were strong over the holiday, said John Kilduff, founding partner at Again Capital LLC. The strong economic activity has played into a “rebound in petroleum demand, which we saw this morning.”

Oil is heading for a yearly gain after a robust rebound from the pandemic, but the rally has wavered in recent weeks, in part due to concerns about omicron. There are some signs of softening consumption in Asia and crude market’s structure has weakened significantly, indicating over-supply in the near term.

The market structure for international benchmark Brent crude is starting to show signs of optimism. The prompt time spread — the gap between the two nearest contracts — has returned to a bullish pattern in recent days after flipping briefly into a bearish contango structure. The spread was 38 cents in backwardation on Monday, compared with as much as 10 cents in contango about a week ago.

Prices

* WTI for February delivery rose $1.78 to settle at $75.57 a barrel in New York

* Brent for February settlement rose $2.46 to settle at $78.60 a barrel

The fast-spreading omicron has forced airlines to cancel some services due to crew shortages, threatening a nascent rebound in jet fuel usage. Anthony Fauci, President Joe Biden’s top medical adviser, said Americans should stay vigilant against the new strain, despite evidence its symptoms may be less severe, because the volume of cases can still overwhelm hospitals.

Meanwhile, negotiations to resurrect the nuclear deal between Iran and world powers are moving toward a state of limbo. An Iran nuclear accord could pave the way for a resumption of official crude flows. The European Union said negotiators needed to speed up efforts to resolve a standoff between Tehran and Washington.

Related coverage:

* Exxon’s Baytown refinery on the Houston Ship Channel is keeping production rates cut as it studies the cause and damage from a fire that erupted Dec. 23 at a reformer feed hydrotreater.

* Japan kicked off a sale of oil from its strategic reserves to combat rising prices with a modest sale, joining an unprecedented coordinated release of crude from strategic stockpiles that’s been led by the U.S.

* Heating demand across the U.S. for the week ending Saturday, Jan. 1, 2022, is forecast to be 63 heating degree days (HDD) less than the long-term normal for this time of year.