Waiting for OPEC+ Supply Decision: Will Oil Rise?
ZFX – Oil prices rose on Thursday morning in Asia, reversing the previous day’s losses. Due to the growing concerns rising from the COVID-19 Omicron variant, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) could halt supply additions.
Brent futures were up from 0.42% to $69.29 as of 9:44 am EDT and WTI futures were up from 0.75% to $66.06.
“Oil prices rose as some investors anticipated that OPEC+ would decide to maintain current supply levels in January to cushion demand disruptions from the Omicron spread,” said Fujitomi Securities Co. analysts. Ltd. Toshitaka Tazawa.
OPEC+ will meet later in the day, where it is likely to decide whether to release more oil into the market as planned or hold the supply. Since August 2021, the cartel has added 400,000 additional barrels per day (bpd) to the global supply each month.
However, the discovery of the Omicron variant has raised some uncertainties, with some investors now predicting that OPEC+ may halt these additions to avoid oversupply.
The Omicron variant quickly became the dominant COVID-19 variant in South Africa in less than four weeks after it was first discovered in the country, with the US reporting its first case on Wednesday.
The US could adjust the timing of its planned release of strategic crude stockpiles if global energy prices fall substantially, Deputy Energy Secretary David Turk said.
Meanwhile, Wednesday’s US crude oil supplies from the US Energy Information Administration showed a decline of 910,000 barrels in the week towards November 26. The forecast, prepared by Investing.com, expects a decline of 1.237 million barrels, while an increase of 1.017 million was noted during the previous week.
Crude oil supplies from the American Petroleum Institute showed a decline of 747,000 barrels. The supplies were released yesterday.
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