According to Reuters, OPEC+ expects the Omicron version of the coronavirus to have a minor and transient impact on oil prices, citing a technical analysis by the organisation. “As the globe grows better equipped to manage COVID-19 and its related issues, the impact of the new Omicron variant is projected to be minor and short-lived,” the report by the expanded cartel’s Joint Technical Committee said.
In addition, both advanced and emerging economies have a stable economic outlook. OPEC + is gathering this week to review output plans, and according to the article, the organisation may decide to stick to its original goal of adding 400,000 barrels per day to combined output per month until production reaches pre-pandemic levels. Even if some members have found it difficult to pump as much as their quotas allow, a recent Bloomberg poll indicated that this is the case.
According to Bloomberg, Russia may not have fully utilised its December quota, producing 10.93 million barrels per day of crude and condensate. However, it is impossible to attribute the crude oil component of the total. The agency then used a flat condensate output assumption to estimate crude oil output was 37,000 bpd below the OPEC+ quota in December. While White Russia’s shortfall may or may not be true, West African oil companies are certainly straining to meet their quotas.
Nigeria was the only OPEC member from West Africa to raise output in November, according to a recent Argus report, although the increase fell short of the target. Whatever OPEC+’s production issues, it’s critical that the cartel sends the word that it’s unconcerned about Omicron or scheduled crude oil reserve releases from the United States, Japan, and South Korea.