Oil Prices Dropped Ahead of Christmas, Market Focus on OPEC+

Oil Prices Dropped Ahead of Christmas, Market Focus on OPEC+

Brent crude futures declined ahead of Christmas, with many investors away for the holidays, nonetheless, the benchmark was still headed for a weekly gain, with the market focusing on the next step by OPEC+ and the impact of Covid’s new variant. Oil prices recovered this week thanks to one very important factor. Concerns regarding the omicron declined, with early data suggesting it causes a milder level of illness.

Brent crude futures dropped 39 cents or 0.5% to $76.46 a barrel by 05:44 GMT. On Thursday, Brent crude futures added 2.1%. Still, the benchmark was on course for a weekly gain of about 4%.

It is worth noting that U.S. markets are closed on Friday for the Christmas holiday.

Oil prices and major producers

Investors and analysts are closely monitoring OPEC’s every move. The Organization of the Petroleum Exporting Countries (OPEC) as well as its allies, will likely stick to its decision to raise oil production by 400,000 barrels per day (bpd) each month at its next meeting as long as oil prices stay above $70 a barrel.

However, some investors remained cautious due to the number of new Covi-19 cases.

Unfortunately, Covid-19’s new variant continues to spread all over the world. Recently, two drugmakers stated their vaccines protected against the omicron variant. Still, the new variant advanced around the globe, with health experts warning the battle against the omicron was not over.

Furthermore, a higher U.S. oil rig count also added pressure on the oil market. As a result, U.S. oil and gas rigs rose to their highest levels in more than a year in the most recent week. Presently,  companies operate 586 oil and gas rigs.

Asian liquefied natural gas (LNG) prices rose this week, in spite of tepid Asian demand.