OPEC+ sticks to incremental output increase amid Omicron uncertainty

OPEC and its allies (OPEC+) reconfirmed Dec. 2 the decision to increase monthly overall crude production by 400,000 b/d in January 2022. News comes as the Omicron coronavirus variant disrupts the market and threatens to weaken fuel demand.

OPEC+ agreed that the Ministerial Meeting shall remain in session pending further pandemic developments and will continue to monitor the market and make “immediate adjustments” if required.

The variant has impacted the market in the past few days, preventing enthusiasm for a recovery in oil demand. If additional lockdowns are triggered, Omicron could cost oil demand almost 3 million b/d in early 2022, according to Rystad Energy.

After the deal was announced, Brent crude oil fell by more than $1, and was below $70/bbl—well below the 3-year high of $86/bbl set in October.