Oil rises in OPEC+ plan to meet ahead of schedule if Omicron reduces demand

By Sonali Paul

MELBOURNE (Reuters) – Oil prices rose on Friday, extending gains after OPEC+ said it would consider adding supply before its next scheduled meeting if the Omicron variant meets demand, but prices still have a Friday drop.

US West Texas Intermediate (WTI) crude oil futures were up 27 cents, or 0.4%, to $66.77 a barrel at 0122 GMT, up 1.4% on Thursday.

Brent crude oil futures rose 12 cents, or 0.2%, to $69.79 a barrel, after gaining 1.2% in the previous session.

The Organization of the Petroleum Exporting Countries, Russia and its allies, collectively known as OPEC+, surprised the market on Thursday with plans to add 400,000 barrels per day (bpd) of supply in January.

However, manufacturers remain open to the possibility of a quick policy change if demand is affected by measures to prevent the spread of the Omicron coronavirus variant. They said they could meet again before their next scheduled meeting on January 4, if needed.

That has boosted prices with “traders reluctant to bet against the group that eventually halted their output hikes,” ANZ Research analysts said in a note.

Wood Mackenzie analyst Ann-Louise Hittle said it makes perfect sense for OPEC+ to stick with its policy now, as it remains unclear whether Omicron can resist existing vaccines.

“The team members are in regular contact and are monitoring the market situation closely,” said Hittle.

“As a result, they can react quickly as we begin to better understand the size of the impact the Omicron variant of COVID-19 could have on the global economy and demand.”

Markets have been roiled all week by the arrival of Omicron and speculation that it could spark fresh shutdowns, reduce fuel demand and prompt OPEC+ to keep production increases unchanged.

Brent is poised to end the week down around 4%, while WTI is on track to drop 2% for the week, both falling for a sixth straight week.

(Reporting by Sonali Paul; editing by Richard Pullin)

https://whbl.com/2021/12/02/oil-up-on-opec-plan-to-meet-ahead-of-schedule-if-omicron-dents-demand/ Oil rises in OPEC+ plan to meet ahead of schedule if Omicron reduces demand


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