OPEC+ may reassess the oil-output increases
Oil prices rose 1% on Monday, recovering from recent losses as major consumers release crude from their reserves, the concerns that the coronavirus pandemic dampens demand, and the rumors that OPEC+ could change its plans to increase oil production.
Brent crude futures rose 81 cents, or 1%, to $79.70 a barrel. West Texas Intermediate (WTI) crude futures rose 81 cents, or 1%, to $76.75 a barrel.
Prices of Brent and West Texas Intermediate (WTI) crude oil benchmarks fell more than $1 in the early hours, hitting their lowest levels since Oct.
Producer group OPEC+ agreed this month to stick to plans to increase oil production by 400,000 barrels (bpd) in December.
Japanese and Indian officials are working with the US and other major economies on ways to free up national crude oil reserves to lower prices. But White House and US energy department officials said no official decision has yet been made on the release.
The discussion comes after the US government failed to persuade the Organization of the Petroleum Exporting Countries and its allies, including Russia, to pump more oil despite major consumers and the world suffering from crude oil shortages.
Some experts expect OPEC+ to continue its plan to gradually add supplies to the market. Otherwise, the industry, it would be driven by unforeseen factors such as quarantines in Europe, the release of strategic oil reserves and shifts in jet fuel demand.
Meanwhile, the SPR release is thought to only affect prices for two or three weeks. Although a larger-than-expected volume adds more downward pressure to the markets, it is said that a combined release could be in the order of 100-120 million barrels or higher.
On the other hand, if no SPR release occurs, market expectations may be disappointed and prices may rebound higher due to lower crude oil and product inventories.
Concerns about demand have been fueled by the anticipation of quarantines in Europe, which has suppressed prices and demand.
Europe has once again become the epicenter of the coronavirus pandemic. Austria entered its fourth national quarantine on Monday. Germany is debating a curfew for unvaccinated people and may introduce new restrictions as well.
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