OPEC + begins its meetings amid expectations of an increase in...

  OPEC+ expects oil surplus to increase in the first quarter of 2022 (Getty)
start OPEC And its allies, among the major oil producers in the alliance known as “OPEC +”, today, Wednesday, two-day meetings to decide whether to pump more oil. oil In the market or curb supplies amid a decline in oil prices and fears that the strain weakened Omicron Mutant corona virus global energy demand.
Oil prices rose by more than three percent, today, Wednesday, to compensate for some of the sharp losses incurred during the previous session, as Brent crude futures rose $2.46, equivalent to 3.6 percent, to $71.69 a barrel by 0742 GMT, after falling 3.9 percent on Tuesday. .
US West Texas Intermediate crude futures rose $2.13, or 3.2 percent, to $86.31 a barrel, after falling 5.4 percent yesterday.  

Oil prices had recorded $86 in October, before falling back this month, as the new variable raised fears of a supply glut.
In November, Brent fell 16.4 percent, while WTI fell 20.8 percent, the largest monthly decline since March 2020.

Waiting for the OPEC + decision

And the Iraqi News Agency quoted Oil Minister Ihsan Abdul-Jabbar as saying that it is likely that OPEC and its allies in the OPEC + alliance will decide to extend the work of the current production policies for the next short period.
A number of OPEC + ministers, including Russia and Saudi Arabia, say that there is no need for the group to take a knee-jerk reaction to adjust production policy.
Since August, the group has been adding 400,000 barrels per day to global supplies, while gradually abandoning the record cuts agreed upon in 2020, when demand waned due to Corona.
And the official Algerian news agency reported that Algerian Energy Minister Mohamed Arkab said, on Tuesday, that OPEC + will provide the global market with enough oil, but urged caution about the impact of the Omicron mutator.
“The threat to oil demand is real,” said Louise Dixon, chief oil market analyst at Rystad Energy. “Another wave of lockdown measures could cause up to 3 million barrels per day of oil demand loss during the first quarter of 2022.”

But Goldman Sachs said that the drop in oil prices in the past days was excessive, as the market takes into account to estimate prices the drop in demand by seven million barrels per day.

Pressure on oil prices

Adding to the pressure on prices, Federal Reserve Chairman Jerome Powell’s statement that the US central bank is likely to discuss accelerating the reduction of bond purchases amid strength in the economy and expectations that high inflation will continue.
The Organization of the Petroleum Exporting Countries (OPEC) meets today, Wednesday, to be followed by a meeting of OPEC + on Thursday.
A delegate from the OPEC + alliance said that the OPEC meeting, today, Wednesday, “should be clear.”
But some analysts have indicated that OPEC + may put plans to add 400,000 barrels per day to supply in January.
Even before Omicron’s emergence, the group was already considering the effects of last week’s announcement by the United States and other countries to use emergency crude reserves to cool energy prices.

End cuts

OPEC + is gradually ending the record supply cuts of ten million barrels per day, which it adopted last year, and there are still cuts of about 3.8 million barrels per day in effect.

The increase in OPEC oil production in November again fell short of the increase planned under an agreement with allies.
In this context, an internal report indicated that the OPEC + bloc expects to increase the oil surplus to two million barrels per day in January, 3.4 million barrels per day in February and 3.8 million barrels per day in March 2022. The report said, according to the report. He told Reuters, “Omicron’s impact will currently be on jet fuel, especially in Africa and Europe.” “Demand for transportation fuels in Europe may also be affected,” he added.

(Reuters, The New Arab)