Working oil pumps against a sunset sky.
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Oil prices rose Thursday, undoing the previous day’s losses as OPEC + was expected to suspend the supply addition as growing concerns over the spread of the Omicron coronavirus variant could weigh on the global economy and fuel demand.
US crude oil futures West Texas Intermediate (WTI) rose 48 cents, or 0.7%, to $ 66.05 a barrel through 0140 GMT, after falling 0.9% on Wednesday.
Brent crude oil futures rose 48 cents, or 0.7%, to $ 69.35 after falling 0.5% in the previous session.
“Oil prices have risen as some investors believe that OPEC + will decide in January to maintain the current level of supply in order to cushion any damage to demand caused by the Omicron spread,” said Toshitaka Tazawa, analyst at Fujitomi Securities.
The organization of petroleum exporting countries and its allies, collectively known as OPEC +, are expected to decide on Thursday whether to release more oil into the market than previously planned or to cut supply.
Since August, the group has been adding an additional 400,000 barrels per day (bpd) of production to global supply each month as it gradually taps into the record cuts agreed in 2020.
The new variant has made the decision-making process more difficult, however, as some observers speculate that OPEC + might pause these additions in January to slow supply growth.
Omicron is quickly becoming the dominant coronavirus variant in South Africa less than four weeks after its first detection. As of Wednesday, the United States was the last country to identify an Omicron case within its borders.
Global oil prices have lost more than $ 10 a barrel since last Thursday when news from Omicron rocked investors.
U.S. Deputy Secretary of Energy David Turk said President Joe Biden’s administration could adjust the timing of planned releases of strategic crude oil supplies if global energy prices drop significantly.
Gains in oil markets on Thursday were capped as weekly US inventory data showed US crude oil inventories fell less than expected over the past week, while gasoline and distillate inventories rose much more than expected due to falling demand.
Crude oil inventories fell 910,000 barrels in the week ended November 26, the Energy Information Administration (EIA) said, compared with analysts’ expectations in a Reuters poll for a decrease of 1.2 million barrels.