OPEC+ sees the oil surplus worsening to 2 million barrels per day (BPD) in January, 3.4 million BPD in February, and 3.8 million BPD in March next year. Generally, the impact of Omicron seems to be jet-fuel-related for now, particularly in Africa and Europe.
It added that the transportation fuel demand within Europe might also be affected. The main question at the meeting will be whether the group proceeds with a plan to increase production in January by 400,000 barrels a day, part of a gradual buildup of supplies as economies around the world revive after pandemic lockdowns. But with the uncertainty over the new Omicron variant and how to respond to President Biden’s release of oil reserves, there is no clear indication of how the oil ministers will go.
Analysts say the oil officials will be mindful of the severe price crashes that occurred in the early months of the pandemic in 2020 when some futures prices fell into negative territory and in 2014 after Saudi Arabia temporarily walked away from trying to manage the markets.
OPEC+ Plus has helped orchestrate a price rise of more than 50 percent this year through careful supply management, and its members will not want those gains to slip away. Mr. Bronze and other analysts say those worries may lead OPEC+ Plus to pause for a month or more the program to increase supplies each month. It could even decide to cut production, although that option seems unlikely.