OPEC and its allies kick off two days of meetings on Wednesday to decide whether to release more oil into the market or restrict supply amid a price drop and fears the Ômicron variant could weaken global demand for oil. energy.
Oil prices dropped to nearly $70 a barrel on Tuesday from $86 a barrel in October, registering their biggest monthly drop since the start of the pandemic, as the new variant raised fears of an oversupply.
In November, Brent fell 16.4%, while WTI fell 20.8%, the biggest monthly drop since March 2020.
“The threat to oil demand is genuine,” said Louise Dickson, senior oil markets analyst at Rystad Energy. “Another wave of lockdowns could result in a loss of oil demand of up to 3 million barrels per day in the first quarter of 2022.”
Also putting pressure on prices, Federal Reserve Chairman Jerome Powell said the US central bank will likely discuss accelerating the reduction in bond purchases amid a strong economy and expectations that an increase in inflation will persist.
The Organization of Petroleum Exporting Countries (OPEC) meets this Wednesday, followed by a meeting on Thursday of OPEC+, which groups OPEC with allies, including Russia.
Several OPEC+ ministers, including Russia and Saudi Arabia, said there was no need for an automatic group reaction.
But some analysts have suggested that OPEC+ may suspend plans to add 400,000 barrels a day (bpd) to January supply.
The group was already weighing the effects of last week’s announcement by the United States and other countries to release emergency oil reserves to moderate prices.
Reference: CNN Brasil