The OPEC + expects the impact of the Omicron variant of the coronavirus on the oil market to be mild and temporary, keeping the door open to further increase in production, a technical report accessed by Reuters on Sunday showed.
“The impact of the new Omicron variant is expected to be mild and short-lived, as the world becomes better equipped to manage Covid-19 and its related challenges,” the Joint Technical Committee (CTC) report stated.
“This adds to a stable economic outlook in both advanced and emerging economies,” he added.
The Organization of the Petroleum Exporting Countries (OPEC) will meet on Monday at 13:00 GMT to discuss the appointment of a new secretary general to succeed Nigerian Mohammad Barkindo, according to a letter seen by Reuters.
This will be followed on Tuesday by a meeting of OPEC and a Russian-led group of allies, known as OPEC +, to discuss whether to go ahead with raising production targets by 400,000 barrels per day (bpd) in February.
The CTC will also meet on Monday at 10:00 GMT to discuss market fundamentals.
In the report’s baseline scenario, OECD commercial oil stocks in 2022 will remain below the 2015-2019 average in the first three quarters, and will rise above that average by 24 million barrels in the fourth quarter.
The scenario assumes the release of 40 million barrels of strategic oil reserves in the first half of the year, and that 13.3 million barrels will return to the US strategic reserve in the third quarter.
The report kept oil demand growth forecasts unchanged in 2021 and 2022, at 5.7 million and 4.2 million bpd, respectively.