OPEC+ Likely To Stick To Existing Policy At 4 January Meeting

According to sources speaking with Reuters, OPEC and allies would likely stick to existing oil production policy at the upcoming 4 January 2022 meeting.

This would mean hiking output by 400,000 barrels per day starting next February. The sources cited an easing of concerns about the impact that the spread of Omicron will have on demand and the recent recovery in prices as increasing the organization’s confidence that further output hikes remain appropriate.

The latest statements are in line with market expectations and have not impacted crude oil price action. Oil prices have spent Thursday trading within recent ranges, with front-month WTI futures in recent trade rebounding from a brief dip back under the USD 76.00 level to back above the USD 77.00 mark and eyeing a test of Wednesday’s post-bullish inventory monthly highs at USD 77.30.

At present, WTI is trading just over 50 cents highs on the session, a continuation of the positive bias that has lifted the American crude oil benchmark from as low as USD 72.50 at the start of the week to current levels over USD 4.50 higher.

The main theme driving oil prices on Thursday continues to be the broadly positive mood in markets more broadly. US equities are currently trading at record levels with the S&P 500 close to 4800. Market participants have become substantially less pessimistic over the last week or so about how they view the Omicron Covid-19 variant impacting the global economy and crude oil demand, studies as well as real-time data all points to the fact that the new variant is substantially milder than anything that has come before it.

Governments are for the most part not returning to the strict lockdowns seen in the past, as Omicron hasn’t shown much threat of overwhelming health care systems with patients.