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* Upbeat U.S. Federal Reserve boosts risk appetite
* U.S. crude inventories drop more than expected, demand
surges
* Saudi Arabia's October crude oil exports hit 18-month high
* Britain, South Africa post biggest rise in daily COVID-19
cases
(Updates with settlement prices, market activity)
By Stephanie Kelly
NEW YORK, Dec 16 (Reuters) - Oil prices rose around 2% on
Thursday, as record U.S. implied demand, falling crude
stockpiles and an upbeat economic outlook from the Federal
Reserve trumped fears of the Omicron coronavirus variant hurting
global consumption.
Crude and other risk assets such as equities also got a
boost after the Fed gave an upbeat economic outlook, lifting
investor spirits even as the U.S. central bank flagged a
long-awaited end to monetary stimulus.
"The market was fearful of what the Fed was going to do, and
now that it's in the rearview and we know what we're dealing
with, the market is rallying," said Phil Flynn, senior analyst
price futures group in Chicago.
Brent crude oil rose $1.14, or 1.5%, to settle at
$75.02 a barrel, while U.S. West Texas Intermediate (WTI) crude
rose $1.51, or 2.1%, to settle at $72.38 a barrel, a 2.13
percent gain.
Demand has been rising in 2021 after last year's collapse.
On Wednesday, the U.S. Energy Information Administration (EIA)
said product supplied by refineries, a proxy for demand, surged
in the latest week to 23.2 million barrels per day (bpd).
"These figures suggest a healthy economic backdrop," said
Tamas Varga of oil broker PVM.
"Although the Fed's announcement triggered a jump in both
oil and equity prices, the withdrawal of economic support
together with the Omicron crisis are the two major headwinds the
oil market is currently facing," he added.
Lending further price support, the EIA also reported that
U.S. crude stocks fell 4.6 million barrels, more than analysts
had forecast.
In Saudi Arabia, crude oil exports in October rose for a
sixth straight month to their highest since April 2020, the
Joint Organisation Data Initiative (JODI) said on Thursday.
Limiting gains were worries about the virus and the prospect
of a supply surplus next year, as flagged by the International
Energy Agency in its monthly report this week.
Britain and South Africa reported record daily COVID-19
cases while many firms across the globe asked employees to work
from home, which could limit demand going forward.
On Thursday, AstraZeneca and Regeneron
reported contrasting data on the effectiveness of their COVID-19
antibody therapies against the Omicron variant of the
coronavirus.
U.S.-based Regeneron said its REGEN-COV therapy, also called
Ronapreve, is less effective against Omicron, while
Anglo-Swedish rival AstraZeneca said a lab study found that its
antibody cocktail Evusheld retained neutralising activity
against Omicron.
(Reporting by Stephanie Kelly; additional reporting by Alex
Lawler and Jessica Jaganathan; Editing by Jason Neely, Mark
Potter, Kirsten Donovan, David Gregorio, Diane Craft and Mark
Porter)
