Oil prices rose 2% on Wednesday morning, recovering some of its losses ahead of the OPEC meeting.
It is scheduled that OPEC will study how to meet the demand for fuel in the Omicron variant.
Brent crude futures rose $1.90, or 2.7 percent, to $71.13 a barrel by 0504 GMT, after falling 3.9 percent on Tuesday.
US West Texas Intermediate crude futures rose $1.71, or 2.6 percent, to $67.89 a barrel, after falling 5.4 percent yesterday.
The Organization of the Petroleum Exporting Countries (OPEC) meets today after 1300 GMT, and before Thursday’s meeting of OPEC+, which brings together OPEC with allies including Russia.
Sunil Katke, head of merchandise retail business at Kotak Securities, said: “As the United States and other countries have agreed to release emergency stocks to control price increases…and because oil prices have been revised from US$85 per barrel to close to US$70, OPEC+ may re-examine their strategy. Considering the new variants of the new coronavirus and its impact on global demand, especially in the aviation sector, this situation is likely to happen.”
Even if OPEC+ agrees to go ahead with the planned January supply increase, producers may find it difficult to add that much.
A Reuters survey found that OPEC pumped 27.74 million barrels per day in November, an increase of 220,000 barrels per day from the previous month, but that was less than the increase of 254,000 barrels per day allowed for OPEC members under the OPEC+ agreement.
Oil prices fell to nearly $70 a barrel yesterday, Tuesday, from a high of $86 in October, recording its largest monthly decline since the beginning of the pandemic, as the new parameter raised fears of a supply glut.
In November, Brent fell 16.4%, while WTI fell 20.8%, the largest monthly decline since March 2020.
“The threat to oil demand is real,” said Louise Dixon, senior oil market analyst at Rystad Energy. “Another wave of closures could cause a loss of up to 3 million barrels per day in oil demand during the first quarter of 2022.”