Oil prices climbed on Friday, extending gains after OPEC+ said it would review supply additions ahead of its next scheduled meeting if the Omicron variant dents demand, but prices were still on course for a sixth week of declines.
U.S. West Texas Intermediate (WTI) crude futures rose $1.19, or 1.8%, to $67.69 a barrel at 0453 GMT, adding to a 1.4% gain on Thursday.
The Organization of the Petroleum Exporting Countries, Russia and allies, together called OPEC+, surprised the market on Thursday when it stuck to plans to add 400,000 barrels per day (bpd) supply in January. read more
That boosted prices with “traders reluctant to bet against the group eventually pausing its production increases,” ANZ Research analysts said in a note.
“The group’s members are in regular contact and are monitoring the market situation closely,” Hittle said in emailed comments.
“As a result, they can react swiftly when we start to get a better sense of the scale of the impact the Omicron variant of COVID-19 could have on the global economy and demand.”
The market has been roiled all week by the emergence of Omicron and speculation that it could spark new lockdowns, dent fuel demand and spur OPEC+ to put its output increases on hold.
For the week, Brent was poised to end down about 2.6%, while WTI was on track for a less than 1% drop, with both heading lower for a sixth straight week.
JPMorgan analysts said the market fall implied an “excessive” hit to demand, while global mobility data, excluding China, showed that mobility is continuing to recover, averaging at 93% of 2019 levels last week.
“So far we see no signs of demand weakening on (a) global scale,” JPMorgan commodities analysts said in a note.