Omicron Variant caused oil to rise 1% before OPEC meetings

Oil prices recovered some of their losses on Wednesday after falling sharply on the previous trading day. Primary producers are preparing to discuss how to deal with the threat of a blow to fuel demand for Omicron variants.

At 0122 GMT, US West Texas Intermediate (WTI) crude oil futures rose 78 cents, or 1.2%, to 66.96 US dollars per barrel, and fell 3.9% on Tuesday.

After falling 5.4% on Tuesday, Brent crude oil futures rose by US$1.01, or 1.5%, to US$70.24 per barrel.

The Organization of Petroleum Exporting Countries (OPEC) + Russia will hold a meeting on Wednesday and Thursday.

Some analysts expect OPEC+ to suspend its plan to increase the supply of 400,000 barrels per day in January. Their concern is that travel restrictions may hit demand to control the spread of Omicron variants. However, several OPEC+ ministers indicated that there is no need to change the curriculum.

Even if OPEC+ agrees to increase supply in January, producers may not increase that much.

A survey found that OPEC’s November daily production was 27.74 million barrels. It increased 220,000 barrels from the previous month, but lower than the OPEC+ agreement allowed OPEC member states to increase by 254,000 barrels.

According to market sources, data from the American Petroleum Institute industry organization showed that as of the week of November 26, US crude oil inventories fell by 747,000 barrels, which was less than expected. This is a negative sign of demand.

Several analysts expect crude oil inventories to decrease by approximately 1.2 million barrels.

At the same time, gasoline inventories increased by 2.2 million barrels. This result is unchanged from analysts’ expectations. However, distillate inventories rose by 789,000 barrels, with a higher increase than analysts’ expectations.