Oil prices rose on Monday, starting the year 2022 with a positive note ahead of Tuesday’s January 4th OPEC+ meeting, which focused on suppliers, but rising COVID-19 cases continue to dampen demand sentiment.
Brent crude rose 59 cents, or 0.76%, to $78.37 a barrel as of 0440 GMT. West Texas Intermediate (WTI) crude futures rose 63 cents, or 0.84%, to $75.84 a barrel.
Libya’s state oil company said on Saturday that the country’s oil production will decrease by 200,000 barrels per day for a week due to maintenance of the main pipeline between the Samah and Dahra fields.
Before the meeting of the Organization of Petroleum Exporting Countries and its allies (OPEC+), the news about the tightening of the supply from Libya had a positive effect on the market.
Meanwhile, OPEC+ will likely stick to its plans to add 400,000 bpd in February.
Oil prices rose nearly 50% last year, spurred by the global economic recovery and the producer group’s restrictions, even as infections caused by the COVID-19 pandemic have reached record highs worldwide.
U.S. health experts have warned Americans to prepare for serious disruptions in the coming weeks, as infection rates are likely to worsen as increased holiday travel, New Year’s celebrations and schools reopen following the winter holidays.
Oil analysts have lowered their price forecasts for 2022 as the Omicron coronavirus variant fuels downside headwinds against a recovery in fuel demand and risks oversupply as producers pump more oil.
U.S. energy firms added oil and natural gas rigs for a record 17 months in a row as higher prices lured some drillers back to the wellpad after last year’s coronavirus-driven decline in demand.
U.S. crude oil production rose 6% from the previous month to 11.47 million barrels per day in October as the Gulf of Mexico production region recovered from hurricanes, according to a monthly report released by the Energy Information Administration (EIA) on Thursday.