Oil prices are rising today after the recent sharp falls as large producers begin to discuss future production against the backdrop of the omicron variant of the coronavirus. There are again travel restrictions that could dampen oil demand.
Stock markets, often moving in unison with oil prices, also rebounded as investors took advantage of the slump in the previous trading session because they did not believe Omikron would wipe out the economic recovery.
The crude oil futures gave up some of their gains after an OPEC + document shows the group is forecasting a larger oil surplus in the new year.
Both Brent and WTI front month contracts posted the largest percentage declines since March 2020 at 16% and 21% respectively in November.
Some analysts believe that OPEC + will suspend its plans to increase production by 400,000 barrels a day in January.
OPEC + sees a deterioration in the oil surplus to 2 million barrels per day (bpd) in January, 3.4 million bpd in February and 3.8 million barrels per day.bpd in March next year, according to an internal report from Reuters.
"There are many indications that OPEC + will initially not increase its oil production any further in order to keep current prices at around USD 70 / bbl," said market analyst Stephen Brennock.
"OPEC + has been on the cautious side since it began to slowly increase supply and put a planned production increase on hold in January and keep its quota unchanged with its cautious approach."
However, several OPEC + ministers said there was no need to change the funding plan. But even if OPEC + agrees to continue its planned supply hike in January, producers may struggle to add that much.
Source
Hansa Terminhandel GmbH