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This Tuesday, January 4, OPEC member countries and their allies are once once more debating their production strategy. In the context of contamination due to the Omicron variant, caution should still be the order of the day.
Omicron should support the prudent policy of the producing countries. But the question is where the cursor will be placed. It is difficult to see what might decide the members of OPEC + to go beyond the gradual increase of 400,000 barrels days that they have renewed each month since mid-2021. But given the rebound in the pandemic, some may be reluctant to release even a moderate amount of additional crude.
For the moment, it is optimism that dominates: the producing countries indeed seem to date to relativize the impact of the new variant and expect a “moderate and short-term” effect, even if the travel restrictions to the international market will decrease demand in the coming weeks.
Falling prices in 2022 according to experts
The International Energy Agency has decided to revise its overall fuel consumption estimates downwards for 2022 precisely because of a slowdown in air traffic. On the other hand, it forecasts an increase in crude production in non-OPEC + countries such as the United States, Canada and Brazil. Countries that should “pumping at their highest annual levels everAccording to the international agency, hence the abundance announced for this year.
Whether or not OPEC + is sensitive to the IEA’s forecasts, and whatever its decision on Tuesday for February production, it does not predict measures that might be taken in the coming months, both the health situation and its impact on economic recovery is uncertain.
This context should fuel price volatility, but they should be down overall this year according to more than thirty experts interviewed by Archyde.com. The rise in prices yesterday is largely attributed to the temporary decrease in Libyan supply following maintenance work on an oil pipeline.
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