OPEC+ Leans Toward Ditching Output Hike as Oil Sinks on Virus - Bloomberg

OPEC+ Leans Toward Ditching Output Hike as Oil Sinks on Virus - Bloomberg

OPEC and its allies are increasingly inclined to ditch their plan to raise output next week, as a new virus variant triggered oil’s worst crash in over a year.

The 23-nation alliance led by Saudi Arabia is leaning toward abandoning a plan for a modest production hike scheduled for January when it meets on Dec. 1 to 2, according to delegates who declined to be identified. The group was already considering a pause after the U.S. and other consumers announced the release of emergency oil stockpiles on Monday.

“The emergence of a new Covid variant that could spawn renewed shutdowns and travel restrictions is precisely the type of change in market conditions that could cause ministers to deviate from their plan” to add barrels, said Bob McNally, president of consultant Rapidan Energy Group and a former White House official.

Crude futures sank more than 10% in both London and New York on fears that the new coronavirus variant identified in South Africa could scuttle the fragile economic recovery.