OPEC+ is anticipated to continue with its prediction for output increase in the month of Feb when it meets tomorrow, that is, Tuesday. It… predicts that the effect of the Omicron variant would be mild and just for short-term, some of the insiders mentioned.
The Crude Oil prices have taken the uptrend ahead of the meeting. After a 2.3 percent drop on Friday, New York futures rose beyond $76 a barrel. Brent Crude, the European benchmark, and West Texas Intermediate futures in the United States were trading at $78.91 and $76.08, respectively, at 06:03 a.m., up 1.45 percent and 1.16 percent since Friday.
OPEC+ is a joined force of the Organization of the Petroleum Exporting Countries (OPEC) and its supporters and allies. Moreover, it is led by Russia. The association has been releasing predictions of record oil production cuts that were agreed upon in the year 2020 against the demand odds that would have been caused by the worldwide Covid-19 pandemic.
Currently, its plans would state that it is raising the production of oil to about 400,000 barrels per day (BPD) in February. This would be in line with all such production releases since mid-2021.
Moreover, the association in a technical report mentioned that the Omicron variant of the coronavirus would not be much harmful for the oil industry.
“The impact of … Omicron … is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges. This is in addition to a steady economic outlook in both the advanced and emerging economies.”– the Joint Technical Committee (JTC) report mentioned.
Even though the group has made considerable production increase targets recently, the group has not been able to keep the pace of production going. This was because some of OPEC’s members have faced production limitations and are struggling with it.
Last month, the International Energy Agency (IEA) stated that OPEC+ members who produce oil didn’t meet their set production targets by around 650,000 bpd in November and about 730,000 bpd in the month of October in 2020.
It is yet to be seen if they can meet the production targets for, January and February, 2021, if Omicron literally is going to ‘downplay’.