OPEC+, a consultative body of major non-OPEC oil-producing countries such as OPEC and Russia, decided to maintain a daily increase of 400,000 barrels February 2022, saying that Omicron mutations will not significantly affect crude oil demand.
The Wall Street Journal (WSJ) reported on the 4th (local time) that OPEC+ has decided to maintain its existing policy to increase production by 400,000 barrels a day in February. As a result, the policy to increase production of 400,000 barrels a day, which took effect in August last year, will last for seven months.
At a meeting in July last year, OPEC+ decided to increase production by 400,000 barrels from August and agreed to check the policy every month.
OPEC+ predicted that the Omicron mutation would not have a significant impact on crude oil demand. OPEC+ predicted in a meeting report that the excess supply of crude oil would be 800,000 barrels a day in January and 1.3 million barrels in February 2022. It was reduced by more than half from last month’s estimate of 2 million barrels and 3 million barrels. In other words, demand is expected to recover.
An OPEC+ official said, “The storm has passed,” compared to the impact of COVID-19 on crude oil demand last year.
International oil prices recovered to the level on November 26 last year when the Omicron mutation was first reported. The New York Commercial Exchange (NYMEX) West Texas crude oil futures closed at 76.99 per barrel, up $0.91 (1.2%) from the previous trading day.
Russia’s Deputy Prime Minister for Energy Alexander Novak said in an interview with Russia’s 24TV, “OPEC+ believes there is still uncertainty over the spread of Omikron,” adding, “However, the infection rate of Omicron mutations is high, but the risk of neutralization is low, so it will not have a significant impact on crude oil demand.”
