OPEC+ To Meet As Omicron Sparks Price Turmoil

OPEC and the oil cartel's allies hold a key output meeting on Thursday facing new challenges as the Omicron coronavirus variant has roiled markets and other US-led nations decided to tap their strategic reserves

London, (APP - UrduPoint / Pakistan Point News - 30th Nov, 2021 ) :OPEC and the oil cartel's allies hold a key output meeting on Thursday facing new challenges as the Omicron coronavirus variant has roiled markets and other US-led nations decided to tap their strategic reserves.

The OPEC+ alliance has resisted US-led pressure to step up production to bring down surging energy prices, and the emergence of the new variant has complicated the equation.

The meeting "is shaping up to be one of the most significant since the pandemic demand recovery began, and the key signal will be how much more oil will be added to supply to start the new year," said Peter McNally, an analyst at the Third Bridge think tank.

The detection of the new variant on Thursday caused crude prices to plunge more than 10 percent, a first since the massive drops of April 2020.

After bouncing back on Monday, oil prices fell again on Tuesday as the head of US pharmaceutical company Moderna warned that current vaccines might be less effective at fending off the Omicron variant.

Carsten Fritsch of Commerzbank said "there is much to suggest that OPEC+ will not initially step up its oil production any further" in an effort to maintain current prices at around $70 a barrel.

OPEC+ countries began slowly boosting output in May.

The group has been adding 400,000 barrels per day to the markets every month, even though its capacity is 10 times higher than that.

The alliance will discuss its output levels for early 2022 at the meeting.