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Oil up on OPEC+ plan to meet ahead of schedule if Omicron dents demand -Breaking

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© Reuters. FILE PHOTO. A general view of the Cadereyta refinery at Mexico’s state oil company Pemex, near Monterrey (Mexico), April 20, 2020. REUTERS/Daniel Becerril/File Photo

Sonali Paul

MELBOURNE, (Reuters) – Oil prices rose on Friday. This was after OPEC+ stated that it will review supply additions before its next meeting if Omicron hits demand. However, prices are still expected to decline for the sixth consecutive week.

U.S. West Texas Intermediate crude oil futures increased 27 cents or 0.4% to $66.77 per barrel at 0122 GMT. This was in addition to the 1.4% increase on Thursday.

Futures gained 12 cents (or 0.2%) to $69.79/barrel, following an increase of 1.2% during the previous session.

On Thursday, the Organization of the Petroleum Exporting Countries and Russia surprised the market by sticking with its plan to add 400,000 barrels of oil per day (bpd), supply for January.

The producers said they were open to considering changing their policy quickly if there was a shortage of Omicron coronavirus variants. The producers indicated that they were open to meeting again after their January 4th scheduled meeting, if necessary.

This boosted the prices, with traders reluctant to place bets against the group’s eventual production decreases,” ANZ Research analysts stated in a note.

Ann-Louise Hittle, Wood Mackenzie analyst, said that it would make sense for OPEC+ not to change their current policy because it wasn’t clear if Omicron could resist vaccines.

Hittle made the following statement in email comments: “The members of this group are in constant contact and closely monitor market conditions,” Hittle added.

“They can respond quickly when we get a better understanding of the potential impact of Omicron’s COVID-19 on the global economic and consumer demand.”

Omicron has caused turmoil in the market this week. There are rumors that Omicron could trigger new lockdowns, reduce fuel demand and cause OPEC+ to stop increasing its output.

Brent ended the week with a loss of 4% while WTI saw a drop of 2%. Both were down for the sixth consecutive week.

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