SULAIMANI (ESTA) — OPEC and its allies begin two days of meetings on Wednesday to decide whether to release more oil into the market or restrain supply amid an oil price rout and fears the Omicron coronavirus variant could weaken globally energy demand.
OPEC, Russia and allies, together known as OPEC+, postponed technical meetings to Wednesday due to the new Omicron coronavirus variant.
The group was scheduled to meet on Monday.
The Organization of the Petroleum Exporting Countries (OEPC) will meet on Wednesday after 1300 GMT, followed by a meeting on Thursday of OPEC+, Reuters reported.
Several OPEC+ ministers, including from Russia and Saudi Arabia, have said there was no need for a knee-jerk reaction from the group, according to Reuters.
Oil prices dropped to $70 a barrel on Tuesday from as high as $86 in October, posing their biggest monthly decline since the outset of the pandemic.
“The threat to oil demand is genuine,” Reuters quoted senior markets analyst at Rystard Energy Louise Dickson as saying.
“Another wave of lockdowns could result in up to 3 million bpd [barrels per day] of oil demand lost in the first quarter of 2022,” Dickson said.
OPEC+ has been releasing 400,000 barrels per day of oil per month while winding down its record cuts from last year, when it cut production by as much as 10 million bpd to address lower demand caused by the virus lockdowns.
OPEC+ has some 3.8 million bpd of cuts still in place and some analysts have suggested the group could pause with the increases after the release of stocks and possible repercussions for demand from new lockdowns to contain the new variant.
