OPEC + closely follows new variant of COVID-19, some worried about outlook

OPEC + closely monitors the information about the new variant of the coronavirus COVID-19, called “omicron” by the World Health Organization (WHO), sources said, and some countries expressed concern that the prospects for the oil market could worsen , less than a week before a meeting to establish the group’s pumping policy.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, are facing a U.S.-led release of crude stocks to try to cool prices.

OPEC + has resisted calls from the United States to do more to lower oil prices, and has continued to ease restrictions by adding 400,000 barrels of supply every month since August.

Global authorities reacted with alarm on Friday to a new variant of the coronavirus detected in South Africa, with the European Union and Britain among those tightening border controls, as researchers sought to find out if the mutation is resistant to the vaccine.

Oil prices fell more than 9% on Friday to less than $ 75 a barrel.

“It is not good, as it adds pessimism to an already weak outlook,” said an OPEC delegate, who asked not to be named, of the new variant.

OPEC + meets on December 2 to decide its production policy. Another source said the group would assess the importance of the variant to the market.

Another OPEC delegate acknowledged the price slump on Friday, but said it was not yet clear what impact the variance would have. “I’m very worried. There are many unknowns at this time ”.

Before Friday, OPEC + sources maintained that the group had not discussed stopping its production increase in January. Iraq said on Thursday that OPEC + should stick to its current plan.

A source familiar with the discussions in Russia, meanwhile, downplayed the variant. “I think the panic in the market for the new version of COVID should calm down,” he said.