Oil prices rose, Thursday, ahead of the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, in what is known as OPEC+, scheduled to be held later today.
The rise in oil prices came in light of expectations that the OPEC + alliance will stop the increase in supplies, amid growing concern that the spread of Omicron, the new strain of the Corona virus, negatively affects the global economy and reduces demand for fuel, according to Reuters.
Brent crude futures rose 48 cents, or 0.7 percent, to $69.35 a barrel by 0140 GMT, after falling half a percent in the previous session.
US West Texas Intermediate crude futures were not less fortunate than the previous one, as they also rose 48 cents, or 0.7 percent, to $ 66.05 a barrel, after falling 0.9 percent on Wednesday.
“Oil prices rose with some investors anticipating that OPEC+ would decide to maintain current supply levels in January to mitigate any impact on demand from the Omicron spread,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co., Ltd.
The OPEC + alliance is likely to decide on Thursday whether the grouping will pump more oil into the market according to previous plans or restrict supplies.
Since August, the gathering has been adding another 400,000 barrels per day of production to global supplies every month, as part of gradually reducing the record cuts agreed upon in 2020.
However, the new strain has complicated the decision-making process, as observers expect that OPEC + may pause these additions in January in an attempt to slow supply growth.
And the spread of the Omicron mutant is accelerating, to be on the verge of becoming the dominant strain of the Corona virus in South Africa, less than four weeks after it was first discovered there. On Wednesday, the United States became the latest country to report an Omicron case within its borders.
Global oil prices have jumped more than ten dollars a barrel since last Thursday, when news of the emergence of Omicron shocked investors.
In this context, the US investment bank Jefferies expected oil prices to rise “significantly” from their current levels, given the deep world’s dependence on fossil fuels, pointing to the possibility of reaching $150 a barrel.
“In a world that has really reopened – which is a big thing – the price of oil can go up dramatically,” Christopher Wood, global head of equity strategy at the US bank, told CNBC on Wednesday.
“Oil is over $80 with a lot of countries in Asia closed, and China’s borders are still virtually closed. In a world that has really completely reopened, the price of oil can go up to $150 because the supply constraints are big,” he added.
The strategic expert said that the “political attack” on fossil fuels in recent years has removed the incentive to invest in the sector despite its continuing importance, noting that 84% of global energy demand last year was met by fossil fuels.
And he added: “The issue for me is not the price of oil, the issue is the pandemic, the price of oil will rise in a world that has completely reopened because no one is investing in oil, but the world is still consuming fossil fuels. So oil can go up a lot and that can definitely lead to Escalation of fear of inflation.
On Wednesday afternoon, international benchmark Brent crude futures were at $71.90 a barrel, while US crude futures were at $68.50 a barrel.