Sonali Paul

MELBOURNE (Reuters – Oil prices recouped some of the losses from Wednesday’s session after steep drops in the previous session. This was as major oil producers prepared for discussions about ways to deal with the Omicron variant threat that could affect fuel demand.

U.S. West Texas Intermediate crude oil futures increased 78cs or 1.2% to $66.96 per barrel at 0122 GMT. This was after Tuesday’s 3.9% decline.

Futures gained 1.5% or $1.01 to $70.24/barrel, following a Tuesday slump of 5.4%.

On Wednesday at 1300 GMT, the Organization of the Petroleum Exporting Countries or OPEC (OPEC), will meet ahead of a meeting of OPEC+ which takes place on Thursday. This group includes OPEC and allies like Russia.

Some analysts believe that OPEC+ will halt its plans to add 400,000 barrels per hour of production in January because of potential demand hit from travel bans. But, several ministers at OPEC+ said they were not rushing to reverse course.

“The market continues looking for signs that Omicron might have an impact on demand,” ANZ Research commodity analyst said in a memo.

Even if OPEC+ approves of its January supply rise, it may prove difficult for producers to continue adding that much.

A Reuters survey showed that OPEC pumped 27.74 millions bpd in November. That’s up by 220,000 bpd compared to the previous month. However, it was still below the 254,000 bpd growth allowed under the OPEC+ arrangement.

According to market sources data, stocks dropped by 747, 000 barrels during the week ending Nov. 26. This was an indication of weakening demand.

Ten Reuters polled analysts who expected that crude stockpiles would fall to 1.2 million barrels.

The gasoline inventory rose by 2.25 million barrels, versus analysts’ projections of no change. Distillate stocks rose to 789,000 barrels. This was an increase that analysts were expecting.