OPEC+ Meetings Postponed To Evaluate Omicron Impact

OPEC+ has postponed two meetings scheduled for the current week in order to avail more time to evaluate the implications of the latest coronavirus update about the emergence of a highly mutated variant.

The group had moved the meeting of its joint technical committee to Wednesday from Monday, and the meeting of the joint ministerial committee to Thursday from Tuesday. Another two meetings, of OPEC and OPEC+, will take place as originally planned, on Wednesday and Thursday.

News of omicron’s emergence last week did on Friday what the release of 50 million barrels from the U.S. strategic petroleum reserve couldn’t do, as it led to a sharp drop in oil prices, with Brent crude shedding over $10 in a single day and WTI falling below $70 per barrel for the first time in months.

Since then, however, oil prices have rebounded somewhat on expectations that OPEC+ might stop increasing oil production. Suggestions that the group may do just that came almost immediately after President Biden announced the release of crude from the strategic reserve.

Now, with the new variant and renewed worry about the global economic recovery, worry about oil demand is on the rise, too, strengthening any internal OPEC+ arguments in favor of a suspension of output additions.