Oil up on OPEC+ plan to meet ahead of schedule if Omicron dents demand

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 hits demand, but prices were still on course for a sixth week of declines.

U.S. West Texas Intermediate (WTI) crude futures rose 27 cents, or 0.4%, to $66.77 a barrel at 0122 GMT, adding to a 1.4% gain on Thursday.

Brent crude futures rose 12 cents, or 0.2%, to $69.79 a barrel, after climbing 1.2% in the previous session.

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.

 

However the producers left the door open to changing policy swiftly if demand suffered from measures to contain the spread of the Omicron coronavirus variant. They said they could meet again before their next scheduled meeting on Jan. 4, if needed.

That boosted prices with "traders reluctant to bet against the group eventually pausing its production increases," ANZ Research analysts said in a note.

Wood Mackenzie analyst Ann-Louise Hittle said it made sense for OPEC+ to stick with their policy for now, given it was still unclear whether Omicron could resist existing vaccines.

"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.

Brent was poised to end the week down about 4%, while WTI was on track for a 2% drop on the week, both down for a sixth straight week.