As the new COVID-19 variant, Omicron, has thrown an uncertain picture on the world economic outlook, OPEC and its oil-producing allies maintained course on increasing oil production in a meeting Dec. 2, according to the Associated Press.
OPEC+ is waiting to learn whether vaccines and treatments are effective against the new variant before changing pricing, Louise Dickson, senior oil markets analyst for Rystad Energy, told the news service. A decrease in demand for oil is likely, she said.
“The distribution of these remedies may not actually reach all markets with extreme immediacy, which would still necessitate the lockdowns in much of the developing world,” she said.
However, at its Dec. 2 meeting, OPEC+ voted to increase production by 400,000 barrels a day in January, AP said.
The decision signals “the group does what it says and that they will continue their policy on their own terms,” Dickson told AP. “It also really signals that OPEC+ needs a bit more time to really dig into the numbers on the Omicron variant.”
World oil prices have dropped since the outbreak of the Omicron variant, AP reported. Prices went from $78 a barrel a week before the OPEC+ meeting to about $67 a barrel on Dec. 2, the story said.
“We are not worried,” about the variant lowering oil demand, Saudi Arabian Energy Minister Abdulaziz bin Salman told Asharq Al-Awsat newspaper, AP said.