Oil prices are stabilizing, and attention turns to the OPEC Plus meeting on Thursday


LONDON: Oil prices, which have been highly volatile since the discovery of the novel coronavirus Omicron, maintained a reasonable rise on Wednesday in a market awaiting the outcome of the two-day cycle of meetings between OPEC and its allies through the OPEC Plus alliance.
And the price of a barrel of Brent, the North Sea reference, for February delivery, at around 16:45 GMT, increased by 2.98%, to reach $71.29.
In New York, the price of a barrel of West Texas Intermediate for January delivery rose by 2.84% to $68.06.
These two contracts, which lost more than 5% on Tuesday, are “recovering as major producers try to address the threat to hydrocarbon demand from the Omicron mod,” said Avtar Sandu, an analyst at Philips Futures.
The 13 members of the Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, held, on Wednesday, their first expected summit this week, via video link, without publishing any result at the end of it.
The decision that the markets are awaiting regarding the cartel’s production level will not be known at the beginning of next year, until the conclusion of the second summit Thursday, which will also be attended by his ten allies through OPEC Plus, which is led by Russia.
RBC’s Helima Croft said that “it is clear that the emergence of the Omicron mutant and the ensuing decline in prices, increase the chances that OPEC Plus chooses to keep stopping” the increase in production instead of increasing 400,000 barrels per day as it has been doing monthly since May. /Mayo.
The health restrictions imposed to counter the spread of the new mutated corona, whose degree of danger is not yet known, threatens the demand for black gold.
This strategy will also be an attempt to somehow reduce the price decline unfavorable to producers, which has reached more than 10% since Thursday evening and this despite the current improvement.
Investors also took note Wednesday of the state of crude oil inventories in the US last week.
The latter fell less than what analysts expected, according to figures published Wednesday by the US Energy Information Agency, by 900,000 barrels.
The market is also closely watching the negotiations on the Iranian nuclear file, which resumed Monday.
Iran, a historical producer within OPEC, has been left out of the market since Donald Trump in 2018 withdrew from the 2015 Iran nuclear deal aimed at preventing Tehran from acquiring a nuclear weapon.
A possible lifting of sanctions could increase the cartel’s supply in a framework that has become increasingly uncertain in relation to demand.


Please enter your comment!
Please enter your name here