Oil prices rose in trading today, Friday, by more than 3%, supported by the movements of OPEC +, which maintained the planned increase of 400,000 barrels per day during the month of January.
The OPEC + alliance indicated that the meeting will continue, if it is in session, to continue to monitor the market closely, on the developments of the novel coronavirus mutant Omicron, and to make immediate adjustments if necessary.
Oil Prices Today
Brent crude futures prices – for February 2022 delivery – rose by 3.07%, recording $71.81 a barrel.
The prices of West Texas Intermediate crude futures – January delivery – also rose 3.04%, recording $68.52 a barrel.
And oil prices had ended their trading yesterday, Thursday, with a rise of more than 1%, after a volatile session, following the decision of the OPEC + alliance to stabilize the production policy.
The Organization of the Petroleum Exporting Countries and its outside allies led by Russia in the OPEC+ alliance surprised the market on Thursday when it stuck to plans to add 400,000 barrels per day of supplies in January.
“Unless we get a significant escalation in Omicron… this week Brent and West Texas levels are likely to record medium-term lows,” said Jeffrey Haley.
However, the OPEC+ alliance left the door open for a swift policy change if demand suffers measures to contain the spread of the coronavirus mutated Omicron, stressing that they can meet again before their next meeting scheduled for January 4, if necessary.
ANZ Research analysts said the OPEC+ decisions boosted prices, with traders reluctant to bet that the alliance would pause production increases.
Wood Mackenzie analyst Ann-Louise Hettle made clear that it makes sense for OPEC+ to stick with its policy for now, given that it remains unclear how light or severe Omicron is compared to previous variants.
“Members of the group are in regular contact and are closely monitoring the market situation,” Heitl said, Reuters reported.
The market has been turbulent throughout the past week due to the emergence of the Corona mutator, and speculation that it may lead to new closures, reduce demand for fuel and motivate OPEC + to suspend its production increases.
Over the course of the week, Brent crude was on the verge of ending trading down 2.4%, while WTI was on track to fall 0.4%, with both heading for the sixth consecutive week of decline for the first time since November 2018.
JPMorgan analysts said the market downturn implied an “excessive” hit to demand, while global mobility data last week, excluding China, showed mobility continuing to recover, averaging 93% from 2019 levels.
“So far we see no signs of weak demand globally,” JPMorgan Commodities added in a note.
SOURCE : REUTERS