Oil prices rose on January 5, rising towards $81 a barrel after OPEC+ producers adhered to an agreed output target rise for February and investors analyzed the impact of the Omicron variant of Covid-19.
Brent crude futures gained 65 cents or 0.81% to $80.65 a barrel by 13:17 GMT. U.S. West Texas Intermediate (WTI) crude futures advanced 56 cents or 0.73% to $77.55.
On January 4, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, agreed to add another 400,000 barrels per day of supply in February. The alliance is in the process of unwinding record supply cuts of roughly 10 million barrels per day.
But it won’t be easy for OPEC and its allies to reach to add another 400,000 barrels per day. OPEC’s members including Nigeria, Libya, as well as Angola face difficulties ramping up production according to analysts from Barclays.
The bank expects Brent oil prices to average $80 a barrel this year.
World oil markets are widely expected to remain prone to geopolitics this year. OPEC+ will likely monitor tensions over Ukraine and ongoing negotiations with Iran.
Oil prices and various factors
The omicron variant of Covid-19 continues to dominate the headlines. On January 3, the United States reported nearly 1 million new coronavirus infections on Monday, the highest daily tally of any country in the world.
Data showing a sharp rise in U.S. inventories last week also influenced oil prices.
U.S. gasoline stock grew by 7.1 million barrels in the week to December 31 according to the American Petroleum Institute. Also, distillate stockpiles rose by 4.4 million barrels in the week.
The U.S. Energy Information Administration its data regarding stocks in several hours.
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