Oil Up over Bets that OPEC+ Might Restrain Supply

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Oil Up over Bets that OPEC+ Might Restrain Supply
Credit: © Reuters.

By Gina Lee

Investing.com – Oil was up Wednesday morning in Asia, clawing back some losses over expectations that the Organization of the Petroleum Exporting Countries (OPEC) and allies (OPEC+) will restrain oil supply during a two-day meeting.

Brent oil futures jumped 2.33% to $70.84 by 10:37 PM ET (3:37 AM GMT). WTI futures rose 2.19% to $67.63, slipping below the $70 mark.

OPEC will meet later in the day, with OPEC+ following a day after, with the cartel expected to pause plans to add 400,000 barrels per day (bpd) of supply in January 2022. The discovery of the omicron COVID-19 variant triggers travel bans and fuel demand worries, but several OPEC+ ministers have said there was no need to change plans.

"The market continues to look for signs of any impact of Omicron on demand," ANZ Research analysts said in a note.

However, producers could struggle to supply more oil even if OPEC+ agrees to an increase.

“The threat to oil demand is genuine. Another wave of lockdowns could result in up to 3 million bpd of oil demand lost in the first quarter of 2022,” Rystad Energy senior oil markets analyst Louise Dickson told Reuters.

Meanwhile, Tuesday’s U.S. crude oil supply from the American Petroleum Institute showed a draw of 747,000 barrels for the week ending Nov. 26, lower than the 1.667-million-barrel draw in forecasts prepared by Investing.com. API reported a build of 2.307 million barrels during the previous week.

Investors now await crude oil supply from the U.S. Energy Information Administration , due later in the day.

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