Oil prices recouped the previous day’s losses Thursday as investors adjusted their positions ahead of the OPEC+ decision on supply policy, but gains were limited on fears that the Omicron coronavirus variant would hurt fuel demand.
The Organization of the Petroleum Exporting Countries and its allies will likely decide on Thursday whether to release more oil into the market or restrict supply, as previously planned.
The market will closely monitor OPEC+’s decision and comments from some key members on future policies after the meeting.
Brent crude futures, which was down 0.5% in the previous session, rose 85 cents, or 1.2%, to $69.72 at 0402 GMT.
West Texas Intermediate (WTI) crude futures rose 85 cents, or 1.3%, to $66.42 a barrel, after falling 0.9% on Wednesday.
Investors loosened their positions ahead of the OPEC+ decision as oil prices fell so fast last week. Global oil prices have lost more than $10 per barrel since the Omicron news shook investors last Thursday.
The new variant, Omicron, has complicated OPEC+’s decision-making process, and some observers think the group may halt supply increases in January in an attempt to slow supply growth. Since August, the group has been adding an additional 400,000 barrels per day (bpd) of output to global supply each month as it gradually eases the record cuts agreed in 2020.
Oil prices also rose as some investors predicted OPEC+ will decide to maintain current supply levels in January to mitigate demand damage from the Omicron concern.
Fears over the impact of the Omicron variant of the coronavirus rose after the first case was reported in the United States, with the central bank of Japan warning of the economic threat as countries respond with tighter containment measures.
The US could change the timing of the release of stockpiles and adjust the timing of the planned release of strategic crude oil stockpiles if global energy prices fall significantly.
Gains in oil markets on Thursday were capped as US weekly inventory data showed US crude inventories fell less than expected last week, while gasoline and distillate stockpiles rose much more than expected as demand weakened.
According to The Energy Information Administration (EIA) crude oil inventories fell by 910,000 barrels in the week through November 26, although analysts had expected a decrease of 1.2 million barrels.
