OPEC and its allies will proceed with their next oil-production hike, but said they could revisit the decision at any moment as the risk to demand from the omicron variant of Covid-19 becomes clearer.
The group agreed to add 400,000 barrels a day of crude to global markets in January. However, it also left the door open to adjusting the plan at short notice if the market changes, an unusual step that underscores the uncertain outlook due to a resurgent pandemic and a U.S.-led release of emergency stockpiles.
“The OPEC+ communique announcing that the meeting remains ongoing is very important -- it signals they’re poised to pause or cut if conditions warrant,” said Bob McNally, president of consultant Rapidan Energy Group and a former White House official. “For now, the fog of uncertainty is too dense and they’ll wait for it to dissipate.”
Oil fell as much as 4.8% to $62.43 a barrel in New York on the OPEC+ agreement, but recovered most of those losses as traders realized a potential get-out clause was baked in to the deal.
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