January 19, 2022

News Collective

Complete New Zealand News World

Omicron variant, a challenge to oil producers |  international

Omicron variant, a challenge to oil producers | international

The OPEC+ alliance of oil producers, led by Saudi Arabia and Russia, is set to agree this week What is the pumping level from January? The omicron variant of the coronavirus challenged the US decision to release part of its strategic petroleum reserves.

(The Netherlands confirms 13 cases of the omicron variant.)

A decision is scheduled to be made next Thursday. On a ministerial conference call between the thirteen members of the Organization of the Petroleum Exporting Countries (OPEC) and the ten independent producers allied with it.

The meeting will be preceded by two internal committees, one technical (on Wednesday) and the other at the ministerial level.

Participants in the discussions will measure the impact of the expansion of Omicron stress on global oil demand. On the other hand, they will analyze the effect that the release of part of the strategic oil reserves in the United States and other major consuming countries will have on supply.

(England will again require mandatory face masks for the Omicron variant.)

The question is whether, under the current conditions, OPEC + will continue with its plan, which has been in place since August, to gradually increase crude oil production, at a rate of 400 thousand barrels per day every month, until next September.

The group therefore plans to return to the market in 2022 with a total of 3.8 million barrels per day (one million barrels per day) which it still holds underground., from the significant production cut (9.7 million barrels) agreed in April 2020 to compensate for the historic collapse in demand, caused by the Corona virus crisis.

See also  Cryptocurrency Market Loses $255,000 Million Due to China Real Estate Crisis

Both consumption and the value of crude oil recovered in the second half of 2021, driving up inflation, for which Washington has been pressing OPEC for months to turn the taps on, so far without success.

The oil alliance ignores these requests despite the fact that “oil prices” This year they are up more than 70% and have reached more than $85 a barrel.

In response, US President Joe Biden announced the largest reduction in his country’s strategic petroleum reserves to date, by 50 million barrels.

These volumes will be provided as part of an extraordinary coordinated alliance with China, India, Japan, South Korea and the United Kingdom, to adjust oil prices.

“This week we launched a major effort to adjust the price of oil, an effort that will expand worldwide and eventually reach your gas station. It will take some time but eventually you should see the price of gasoline go down as you fill your .deposit”Biden said in a message on Twitter on Saturday.

For analyst Louise Dixon, of consultancy Rystad Energy, the stake “It presupposes the official emergence of ‘anti-OPEC+’, a group of countries with large crude oil consumption that takes supply-side dynamics into their own hands.”.

Speculation immediately arose that OPEC+ feared the action promoted by Biden would lead to an oversupply and retaliate by suspending the next supply increases it had planned.

(What is known about omicrón, the new and dangerous variant of covid-19).

In the midst of these tensions, Prices fell on Friday after the World Health Organization described the new strain of coronavirus, known as Omicron, as a “risk variant” and “alarming.”

See also  China's copper imports rise in October for a second month By Reuters

While studying whether due to its multiple mutations it escapes the immune protection of vaccines, several countries have already imposed travel restrictions and suspended flights from various South African countries.

These measures have raised concerns that the pandemic recovery will affect shipments and again slow fuel consumption.

The price of a barrel of Brent oil fell by 12.46% in London, to close at $72.72 on Friday, $10.25 lower than it was at the end of Thursday, while Texas Intermediate Oil (WTI) was at $68.15, marking the year’s biggest drop in a single day, down 13.06%..

EFE