Oil prices rose ahead of OPEC’s meeting

Oil prices rose on Thursday, with investors adjusting ahead of an OPEC+ decision on supply policy. Still, gains were capped by fears that the Omicron coronavirus variant could hit fuel demand.

 Brent crude futures added $1.56 or 2.3% to $70.43 a barrel 10:40 GMT. One day earlier, Brent crude futures dropped 0.5%. 

U.S. West Texas Intermediate (WTI) gained $1.52 or 2.3% to $67.09 on Thursday after a drop on Wednesday. 

Importantly, global oil prices lost more than $10 a barrel since last Thursday, when news of Omicron first shook investors. 

As stated above, investors are closely monitoring the situation. The Organization of the Petroleum Exporting Countries (OPEC), as well as its allies, together known as OPEC+, are likely to decide in several hours whether to release oil into the market as previously planned or to limit supply.

Oil prices and OPEC

Currently, there is little sign the broader group intends to change course from its current output plan. Representatives of Saudi Arabia and Iraq both indicated the group is likely to sustain this output policy. Another major oil producer Russia said that there would be no need for urgent action on the oil market.

 A survey published two days ago found the group pumped 27.74 million barrels per day in November, up 220,000 barrels from October. Nonetheless, that was below the 254,000 increase allowed for OPEC members under the OPEC+ agreement.

OPEC’s meetings come after a period of elevated tension regarding oil prices between the U.S. and its allies in the Gulf.

Several countries decided to release oil from their reserves. They wanted to stabilize the oil market. The world’s largest economy plans to release 50 million barrels from Strategic Petroleum Reserve. Out of the 50 million barrels mentioned above, 32 million barrels will be an exchange over the next several months. The rest will be an acceleration of a previously authorized sale.