Sonali Paul

MELBOURNE (Reuters – Tuesday’s low oil prices came ahead of a meeting in which major producers were expected to keep to their plans to add supplies in February. The high COVID-19 levels have still not sparked lockdowns in some of the most fuel-consuming countries.

Futures rose 1 cent to $78.99 a bar at 0239 GMT. U.S. West Texas Intermediate crude futures fell 2 cents, to $76.06 a bar.

Both benchmark contracts climbed above 1% Monday.

Tuesday will see the Organization of the Petroleum Exporting Countries, Russia and its allies – collectively called OPEC+ meet. At 1200 GMT, the Joint Ministerial Monitoring Committee will meet, then a ministerial meeting takes place at 1300 GMT. Both meetings can be done via video conference.

Three OPEC+ source told Reuters that the group will likely stick with its February plan of increasing output by 400,000 barrels/day, just as it did in August.

RBC Capital Markets analysts believed that OPEC+ wouldn’t change course because of the current price outlook, the pressure exerted by the U.S. Administration to improve supply and the absence of major COVID-19 mobility restraints.

RBC analysts wrote in a note, “Though Omicron cases (COVID-19 variants) continue to increase in key geographic areas,” they said. However, there are no widespread restrictions that will likely prevent near-term demand worries,” RBC analysts added.

They did however say that OPEC+ could have to adjust if there is tension between Russia and West over Ukraine. This would result in fuel supply disruptions. If Iran’s nuclear talks progress with major powers, this would mean an end to the oil sanctions.

RBC analysts stated that “we think these two events constitute major wildcards which could quickly alter price trajectory and test OPEC’s rapid response mechanism.”