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Oil surges 1% ahead of OPEC meeting under Omicron cloud

By on December 1, 2021 0

A maze of crude oil pipes and valves is pictured during a Department of Energy visit to the Strategic Petroleum Reserve in Freeport, Texas, United States, June 9, 2016. REUTERS / Richard Carson / File Photo

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MELBOURNE, December 1 (Reuters) – Oil prices recovered some losses on Wednesday after steep drops in the previous session, as major producers prepared to discuss how to respond to the threat of a blow to fuel the demand for the Omicron variant.

US West Texas Intermediate (WTI) crude futures rose 78 cents, or 1.2%, to $ 66.96 a barrel at 0122 GMT, after falling 3.9% on Tuesday.

Brent crude futures gained $ 1.01, or 1.5%, to $ 70.24 a barrel, after falling 5.4% on Tuesday.

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The Organization of the Petroleum Exporting Countries (OPEC) will meet on Wednesday after 1:00 p.m. GMT before a Thursday OPEC + meeting, which includes OPEC and allies including Russia. Read more

While some analysts expect OPEC + to suspend plans to add 400,000 barrels per day of supply in January in light of the potential demand blow from travel restrictions to curb the spread of the Omicron variant , several OPEC + ministers said there was no need to change course.

“The market continues to look for signs of an impact of Omicron on demand,” commodities analysts at ANZ Research said in a note.

Even if OPEC + agrees to go ahead with its supply increase slated for January, producers might struggle to add as much.

A Reuters investigation found that OPEC pumped 27.74 million b / d in November, up 220,000 b / d from the previous month, but that was lower than the increase of 254,000 b / d authorized for OPEC members under the OPEC + agreement. Read more

In a bearish sign in demand, data from the industry group American Petroleum Institute showed that U.S. crude inventories fell 747,000 barrels during the week ended Nov. 26, according to market sources, representing a lower decline than expected.

Ten analysts polled by Reuters expected crude inventories to drop by about 1.2 million barrels.

At the same time, gasoline inventories increased by 2.2 million barrels compared to analysts’ forecasts that no change was expected, while distillate inventories increased by 789,000 barrels, representing a larger increase than expected by analysts.

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Reporting by Sonali Paul; edited by Richard Pullin

Our Standards: Thomson Reuters Trust Principles.


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