Oil prices rose slightly, reversing the losses experienced on Wednesday, amid expectations that the OPEC+ group will halt supply increases due to growing concerns that the spread of Omicron, the new strain of the coronavirus, could negatively impact the global economy and limit fuel demand.
Brent crude futures climbed 48 cents, or 0.7 percent, to $69.35 a barrel by 0140 GMT, after a 0.5 percent decline during the previous session. U.S. West Texas Intermediate (WTI) crude futures also gained 48 cents, or 0.7 percent, to $66.05 a barrel, following a 0.9 percent drop on Wednesday.
Toshitaka Tazawa, an analyst at Fujitomi Securities Co., stated, "Oil prices rose as some investors expect OPEC+ to decide to maintain current supply levels in January to mitigate any impact on demand from the spread of Omicron."
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are expected to decide on Thursday whether to pump more oil into the market according to previous plans or restrict supplies. The group has been adding 400,000 barrels per day to global supplies each month since August, as part of a gradual reduction of the record cuts agreed upon in 2020.
However, the new strain has complicated decision-making, with observers predicting that OPEC+ may temporarily halt these increases in January in an effort to slow supply growth. The spread of the Omicron variant is rapidly accelerating, likely becoming the dominant coronavirus strain in South Africa less than four weeks after it was first discovered there. The United States also recorded its first case of Omicron within its borders on Wednesday.
Global oil prices have lost more than ten dollars per barrel since last Thursday when news of the emergence of Omicron shocked investors.
