Oil Producers To Increase Output In January

Major oil producers decided on Thursday to raise output levels in January, despite the Omicron coronavirus variant raising fresh questions over demand.

The Opec+ alliance led by Saudi Arabia and Russia has so far resisted US-led pressure to significantly boost output to rein in surging energy prices.

But the emergence of the variant further complicated the equation, as countries have imposed new travel curbs and mull other measures that could dampen demand and hurt oil prices.

The 13 members of the Vienna-based Organisation of Petroleum Exporting Countries (Opec) and their 10 allies met for a little over an hour on Thursday afternoon via video conference.

The group decided to stick with its modest increase in output by 400,000 barrels per day every month, as they have been doing since May.

The Opec+ meeting comes a week after the United States and to a lesser extent China, India and Japan decided to dip into their strategic reserves to help bring down crude prices, after a price surge that has undermined economic recovery.

But the detection of the new variant last week caused crude prices to plunge around 15 percent, a first since the massive drops of April 2020 when the pandemic started to hit hard.

In the hours before the decision was announced prices for the two benchmark contracts, WTI and Brent, had been largely stable at US$66 and US$69 per barrel respectively.

But these fell sharply as the meeting got under way and stood down roughly 2 percent as the announcement of the production increase was announced

At a technical meeting on Wednesday, Opec Secretary General Mohammed Barkindo had "highlighted... that steady progress has been made on the global economic recovery" but also "underscored the need to remain attentive to the prevailing uncertainties and shifting conditions, including those related to the new Covid-19 variant Omicron," Opec said in a statement.

Washington had called on the cartel to further open the taps. (AFP)