Oil prices rise despite “Omicron” .. and OPEC Plus may stop the increase in production

Global oil markets are awaiting today a ministerial-level meeting of the OPEC Plus alliance

Oil prices rose in morning trading today, Thursday, from their lowest level in 3 months, after closing trading yesterday, Wednesday, below $ 69 a barrel of Brent crude, with the continued pressures imposed by the variable “Omicron”.

By 08:00 GMT, the price of Brent crude futures for February delivery rose 1.83%, or $1.25, to $70.10 a barrel.

The prices of US West Texas Intermediate crude futures for January delivery also rose by 1.83%, or $1.21, to $66.77 a barrel.

Global markets are still in a state of confusion due to the new mutation of the Corona virus, despite the relative reassurance of the World Health Organization yesterday about the normal symptoms of those infected with the mutation.

Oil prices lost 12 dollars per barrel, down from an average of 82 dollars per barrel of Brent oil, since the end of trading last Thursday until morning trading today.

OPEC Plus is studying production policy

A source in “OPEC Plus” (OPEC +) said that the group’s ministers are likely to discuss stopping a planned increase in oil production next January as one of the options presented during Thursday’s talks, amid uncertainty about the impact of the Corona pandemic on global demand. on oil.

“The Omicron mutant from Covid-19 and the American intervention in the oil market created an ambiguous situation,” the source told Reuters, referring to Washington’s plan to withdraw from its oil reserves with the aim of curbing prices that reached their highest levels in 3 years in October.

The OPEC Plus alliance – which includes producers members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies – objects to US demands to increase oil production to support the global economy.

Producers said they did not want to derail the fragile recovery in the energy industry by causing a new oversupply.

Russia and Saudi Arabia (the largest producers in the OPEC Plus alliance) said before this week’s meetings that no random reaction was necessary to adjust policy.

Iraq said that it is expected that OPEC Plus producers will extend the current production policy in the near term.

Since last August, the bloc has increased production by 400,000 barrels per day per month, as part of a gradual reversal of the record production cuts agreed upon by producers in 2020, when the demand for oil plummeted due to the pandemic.

Yesterday, Wednesday, OPEC Plus experts said in a report seen by Reuters that the repercussions of the mutant Omicron are still unclear, although many countries have begun to apply restrictions to besiege it.

Even before fears emerged from Omicron, the OPEC Plus alliance was studying the repercussions of the announcement made last week by the United States and other major oil consuming countries regarding the withdrawal of quantities of crude oil reserves to calm prices.

OPEC forecast

The Organization of the Petroleum Exporting Countries expected a supply surplus of 3 million barrels per day in the first quarter of 2022 after withdrawing from the reserves, up from 2.3 million barrels per day in its previous estimates.

However, the report said that the repercussions of withdrawing from the reserves will be limited, because some countries have made them voluntary and because their time range is unclear.

And David Turk, US Deputy Secretary of Energy, told Reuters yesterday that the administration of President Joe Biden may adjust the timing of the withdrawal from the reserves if prices fall sharply.

The OPEC Plus alliance is working to gradually undo the record production cuts it decided last year and amounted to 10 million barrels per day, equivalent to approximately 10% of global oil supply.

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