By Ahmad Ghaddar

LONDON (Reuters) -Oil prices extended gains on Tuesday, with trading near $80 a barrel despite the rapid spread of the Omicron coronavirus variant, supported by supply outages and expectations that U.S. inventories fell last week.

Brent crude rose by 55 cents, or 0.7%, to $79.15 a barrel by 1410 GMT, after hitting a session high of $79.85. U.S. West Texas Intermediate (WTI) crude rose 73 cents, or 1%, to $76.30, after rising to $76.92.

Both contracts traded at their highest in a month.

“Support comes as well from high aggregated production disruptions in Ecuador, Libya and Nigeria and the expectation of another large drop in inventories,” said UBS oil analyst Giovanni Staunovo.

The three oil producers declared force majeures this month on part of their oil production because of maintenance issues and oilfield shutdowns.

Meanwhile, a preliminary Reuters poll showed on Monday that U.S. crude oil inventories are likely to have dropped for the fifth week in a row, while gasoline inventories were seen mostly unchanged last week. [EIA/S]

England will not face any new COVID-19 restrictions before the end of 2021, British health minister Sajid Javid said on Monday, as the government awaits more evidence on whether the health service can cope with high infection rates.

U.S. President Joe Biden, meanwhile, pledged to ease a shortage of COVID-19 tests as the Omicron variant threatens to overwhelm hospitals and stifle travel plans.

Omicron-induced staff shortages led to thousands of flights cancellations over the Christmas weekend in the United States.

China’s symptomatic coronavirus cases rose for a fourth consecutive day on Monday, with Xian reporting more infections in a flare-up that has put the city’s 13 million residents under lockdown.

Investors are awaiting an OPEC+ meeting on Jan. 4, at which the alliance will decide whether to go ahead with a planned production increase of 400,000 barrels per day in February.

At its last meeting, OPEC+ stuck to its plans to boost output for January despite Omicron.

Russia is unlikely to hit its May target of pre-pandemic oil output levels due to a lack of spare production capacity but could do so later in the year, analysts and company sources said on Tuesday.

Money managers raised their net long U.S. crude futures and options positions in the week to Dec. 21, the U.S. Commodity Futures Trading Commission said on Monday.

The speculator group raised its combined futures and options position in New York and London by 4,634 contracts to 259,093 during the period.