Oil rises as investors focus on OPEC+ decision amid growing Omicronfears

Tokyo, Dec. 2 (BNA): Oil prices rose on Thursday, to offset the losses of the previous day, as investors adjusted their positions ahead of the OPEC + decision to increase the supply policy, but the gains were capped on fears that the Omicron virus variable will harm fuel demand.

Brent crude futures rose 85 cents, or 1.2 percent, to $69.72 by 04:02 GMT, after falling 0.5 percent in the previous session.

US West Texas Intermediate crude futures rose 85 cents, or 1.3%, to $66.42 a barrel, after falling 0.9% on Wednesday, according to Reuters.

“Investors canceled their positions ahead of the OPEC+ decision as oil prices fell very quickly and by a lot over the past week,” said Tsuyoshi Ueno, chief economist at NLI Research Institute.

Global oil prices have lost more than $10 a barrel since last Thursday, when news from Omicron shocked investors.

“The market will closely monitor the producer group’s decision as well as the comments of some key members after the meeting to suggest their future policy,” said Oeno.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are likely to decide on Thursday whether to release more oil to the market as previously planned or restrict supplies.

Since August, the group has been adding an additional 400,000 barrels per day of production to global supply each month, as it gradually reduces record cuts agreed in 2020.

However, the new format has complicated decision-making, with some observers predicting that OPEC+ may pause these additions in January in an attempt to slow supply growth.

“Oil prices are on the rise as some investors expect OPEC+ to decide to maintain current supply levels in January to mitigate any damage to demand from the Omicron spread,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co., Ltd.

Concerns about the impact of the coronavirus Omicron variable rose after the first case was reported in the United States, and the Bank of Japan warned of economic pain as countries respond with stricter containment measures.

US Deputy Energy Secretary David Turk said the administration of President Joe Biden could adjust the timing of its planned release of strategic crude oil stocks if global energy prices fell significantly.

Gains in oil markets were capped on Thursday as US weekly inventory data showed US crude stocks fell less than expected last week, while gasoline and distillate stocks rose much more than expected on weak demand.

The Energy Information Administration (EIA) said that crude oil inventories (USOILC = ECI) fell by 910,000 barrels in the week ended November 26, compared to analysts’ expectations in a Reuters poll for a decline of 1.2 million barrels.

HF