OPEC+ to increase oil output amidst growing Covid cases.
CIOReview
CIOREVIEW >> Oil & Gas >>

OPEC+ to increase oil output amidst growing Covid cases.

By CIOReview | Monday, January 18, 2021

Since there are increasing omicron cases, OPEC and its non-OPEC allies, known as OPEC+ decided to increase oil output beginning in February.

FREMONT, CA: As energy investors weigh the potential impact of growing omicron Covid cases, many influential groups of some of the world's largest oil producers agreed to commit to their plan to increase oil production starting from February. OPEC and its non-OPEC allies, known as OPEC+, have decided to increase their output target by 400,000 barrels per day beginning next month.  The move was widely anticipated due to the U.S. demand to increase supply and no major new Covid limits. The energy alliance, led by OPEC kingpin Saudi Arabia and non-OPEC leader Russia, is in the process of unraveling record supply cutbacks of almost 10 million barrels per day. The historic production cut was implemented in April 2020 to assist the energy market following the coronavirus pandemic, which slashed demand for crude.

Despite the fact that Covid infections have reached unprecedented highs, with the United States reporting a global daily record of over 1 million infections in just 24 hours, international benchmark Brent oil futures were traded at 79.87 dollars per barrel, up about 1.1 percent, while US West Texas Intermediate futures were traded at 76.89 dollars per barrel, up about 1 percent. Oil prices increased by more than 50 percent last year, as energy investors bet that the highly infectious omicron strain will be less severe than previously thought. Global oil markets are largely predicted to remain geopolitically volatile in 2022, with threat-rattling over the ongoing Russia-Ukraine dispute and Iranian nuclear negotiations likely to be closely followed by OPEC+. It is also a really great wildcard to watch because if Russian troops cross the border into Ukraine, Russia will face huge penalties, which might lead to a serious energy problem if Russia shuts off gas to Europe.