OPEC+ will likely stick to its planned increase in oil output for February when it meets on Tuesday as sources say the group expects only a short-lived impact on demand from the Omicron coronavirus variant.
OPEC+, which groups producers from the Organization of the Petroleum Exporting Countries with others including Russia, has raised its output target each month since August by 400,000 barrels per day.
It was unwinding record of high production cuts of 10 million bpd that were put in place to help the market after the pandemic slashed demand.
Current plans would see it again raise the target by 400,000 bpd for February, leaving about three million bpd in cuts left to unwind by September as per an agreement reached last July.
In a technical report seen by Reuters on Sunday, OPEC+ played down the impact on oil demand from the Omicron variant.
“The impact is expected to be mild and short-lived, as the world becomes better equipped to manage COVID-19 and its related challenges.
“This is in addition to a steady economic outlook in both the advanced and emerging economies,’’ the Joint Technical Committee (JTC) report said.
While OPEC+ has increased its output target each month, actual production has not kept pace as some members struggle with capacity constraints.
OPEC+ producers missed their targets by 730,000 bpd in October and by 650,000 bpd in November, the International Energy Agency said last month.
Reuters/NAN
