Oil prices rose on Thursday after OPEC+ decided to keep its oil production policy unchanged and add another 400,000 bpd on the market in January.
As of 10:14 a.m. EST, post OPEC+ meet, WTI Crude was up 1.46% at $66.53 and Brent Crude had increased 1.35% at $69.80. Both benchmarks erased the losses of 3% right after first news reports suggested the monthly increase was on for January.
OPEC+ is sticking to its production plan to add 400,000 barrels per day (bpd) to its production in January, OPEC said in a statement on Thursday, noting that the meeting remains in session.
The group “agree that the meeting shall remain in session pending further developments of the pandemic and continue to monitor the market closely and make immediate adjustments if required,” OPEC said.
The next regularly scheduled meeting of OPEC+ is set for January 4, 2022.
So, the group is now set to add oil on the market in January, although speculation was high in recent days that OPEC+ could opt for a pause in the monthly increases because of the still high uncertainty over the Omicron COVID variant, the SPR releases led by the United States, and the expected worse-than-thought oil surplus early next year.
The leaders of the group, Saudi Arabia and Russia, had already signaled earlier this week that OPEC+ should not jump the gun and freeze the monthly additions to supply because of the Omicron variant, which has spooked the oil market. With still little information on the new variant and whether it escapes vaccine protection, the alliance looks ready to take further action, if necessary, but it is showing it is not over-reacting to Omicron as many analysts said the market has done.
Initial reactions to the rollover of the production policy suggest that OPEC+ could also believe that global demand will remain resilient during the winter season, and sends a message to the market present in almost every press release: stability.
NB: Tsvetana Paraskova wrote this article for Oilprice.com
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