OPEC+ Maintains Existing 400,000 Barrel Increase... International Oil Prices Rebound

Expectations for Increased Demand as Fear of Omicron Variant Weakens
Possibility of Frequent Adjustments in Production Scale Depending on Market Conditions Remains

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] International oil prices rebounded after two consecutive days of decline as OPEC Plus (OPEC+), a major oil-producing countries' consortium, announced it would maintain the existing monthly production increase of 400,000 barrels in January next year. This is attributed to the easing of concerns over reduced oil demand, following analyses that the market's fear of the COVID-19 Omicron variant was excessive.

According to foreign media including the Associated Press (AP) on the 2nd (local time), OPEC+ stated in a press release after a virtual meeting of oil ministers, "We have decided to maintain the current policy of increasing oil production by 400,000 barrels per day each month in January next year." They emphasized, "However, the meetings remain open, and immediate adjustments can be made if the current market situation changes."

Earlier, the oil market, which had feared that OPEC+ would significantly reduce the existing production increase due to the sharp drop in international oil prices caused by the Omicron variant, rebounded. On the New York Mercantile Exchange (NYMEX), the price of West Texas Intermediate (WTI) crude oil closed at $66.50 per barrel, up 1.4% from the previous session. Brent crude on the London ICE exchange also recorded $70.31, up 2% from the previous session.

International oil prices had fallen for two consecutive trading days due to concerns over renewed lockdowns in various countries amid the spread of the Omicron variant, but they successfully rebounded as analyses emerged that the fear of Omicron was excessive. Although the Omicron variant is highly transmissible, forecasts that it causes only mild symptoms in those vaccinated have significantly alleviated market fears.

According to the UK Daily Mail, Professor Karl Lauterbach, a German public health expert, stated, "The Omicron variant has more than 32 mutations in its spike protein, which may increase infectivity, but it appears to have evolved to be less fatal to infected individuals," adding, "This aligns with the evolutionary patterns of most respiratory viruses." In South Africa, where the Omicron variant was first identified, there have been no reports of severe patients requiring hospitalization or deaths so far.

According to CNBC, investment bank Goldman Sachs also noted in a report the previous day, "The recent decline in international oil prices was excessive. Current prices reflect a scenario where all airplanes worldwide are grounded for the next three months or global lockdowns similar to those in the second quarter of last year are reinstated."

This content was produced with the assistance of AI translation services.