Crude Oil Surges, OPEC+ To Act If Demand Weakens

Crude oil prices edged higher on Friday following statements by OPEC+ that the group could review its policy to hike output if a rising number of pandemic lockdowns obstructs off demand.

Brent futures rose 90 cents, 1.3%, to $70.57 a barrel, while US WTI rose 55 cents, 0.8%, to $67.05. Losses of the week put both benchmarks on track to decline for sixth successive weeks for the first time since November 2018.

OPEC+ surprised the market on Thursday when it stuck to its plans to add 400,000 barrels per day (bpd) supply in January. Its decision to continue increasing monthly crude production is a vote of confidence in the near-term demand outlook.

OPEC+ is pondering the impact of the new Omicron variant on oil demand, but the group left the door open to changing policy swiftly if demand suffered from measures to contain the spread of the Omicron coronavirus variant.

OPEC+ said a meeting could be scheduled on Jan. 4. Brent has climbed to $71 per barrel, which puts it around $5 above yesterday’s daily low.

To explain, OPEC+ said that it could reconsider yesterday’s decision at short notice if market conditions were to change.