Saudi Energy Minister Prince Abdulaziz bin Salman said today, Monday, that the technical meeting of the “OPEC Plus” group has been postponed to next Wednesday, and that the ministerial committee meeting will be held on Thursday “to gain time to review matters.”
This comes at a time when the new Corona mutant, Omicron, is raising concerns about global energy demand.
The Saudi Energy Minister added, "I am not worried about the new corona mutator and its impact on demand in the oil markets."
Global oil markets are awaiting the meetings of the “OPEC Plus” alliance, and it is likely that in these meetings a decision on the bloc’s policy will be announced regarding whether to amend its plan to increase production by 400,000 barrels per day next January and beyond, according to Reuters. .
No need to make hasty decisions
Meanwhile, Russian Deputy Prime Minister Alexander Novak was quoted as saying today, Monday, that Russia does not see the need to take urgent measures on the oil market due to the new strain of the Corona virus, playing down the chances that the “OPEC Plus” group will change production policies this week.
"We must closely monitor the situation, there is no need to take hasty decisions," Novak was quoted by the Russian Interfax news agency as saying.
The spokesman quoted Novak as saying, "Despite all this, we will discuss with the member states of OPEC Plus the market situation, and if any measures should be taken."
"In order to go into details, the Joint Ministerial Monitoring Committee (of OPEC Plus) has moved to obtain more
information on current events, including the new strain of the virus,"
Novak added
.
The Kremlin said the crude market's reaction to Omicron was emotional and temporary.
The CEO of Saudi Aramco, Amin Al-Nasser, also said that the oil markets overreacted to the new Corona mutant.
An online meeting of the Joint Ministerial Committee was scheduled for November 30, but it was postponed to December 2, the same date as the OPEC Plus ministerial meeting.
While the meetings of the Technical Committee were scheduled for Monday, before it was postponed to next Wednesday.
OPEC Plus is resisting
"OPEC Plus" has resisted US calls to pump more oil to limit the price hike, and continued to gradually retreat from a record production cut last year by adding 400,000 barrels per day each month, starting in August.
Given the potential impact of Omicron's measures on demand, Yinyu Yao and Warren Patterson, analysts at ING Group, said, "We believe that OPEC+ can take a rest on its path to oversupply" of crude.
They added, "This will be in accordance with the cautious approach adopted by OPEC Plus since the emergence of Covid-19," according to the French press agency.
Oil price hike
Crude oil prices recorded strong gains on Monday, after the sharp declines recorded last Friday.
The news was about the discovery of the new "Omicron" mutant from the Corona virus, and the measures taken by countries to restrict air transport;
He weighed on oil prices last Friday, as they lost more than 10% during one session in the previous since the first months of the epidemic.
West Texas Intermediate crude futures for January increased to $72.16 a barrel this morning, and Brent crude is currently trading at $72.83, up 6.85% from the previous close.
Brent crude futures also rose $3.36, or 4.7%, to $74.95 a barrel in today's trading, before increasing its gains later.
Avtar Sandu, an analyst at Phillip Futures Group, said that "crude oil is regaining strength on Monday after the shock" caused by the announcement of the discovery of a new mutant of corona in South Africa.
He added that concerns about the new mutation - which could impede economic recovery and the plans of some central banks - have not been dispelled.
"We saw some correction, as the drop in oil prices on Friday was exaggerated," said Tatsufumi Okoshi, chief economist at Nomura Securities.
"If the market declines further, OPEC Plus may stop the planned increase in crude production to support prices," he added.
The World Health Organization warned Monday that the omicron poses a "very high risk" at the global level.
Many countries have taken measures that impede the movement of goods and people, which further weakens the demand for crude oil.
Omicron .. a blow to the recovery of demand
Profit margins for Asian oil refiners fell to their lowest level in nearly 5 months, amid fears that the Omicron strain could deal another blow to the recovery of oil demand, which has already been affected by the rise in Corona virus infections in Europe.
The double blow threatens to derail the global economic recovery, and thus weaken the demand for oil, which the International Energy Agency expects to rise to 96.3 million barrels per day in 2021.
"This is a setback at a time when many travel routes are reopening," said Hoi Lee, an economist at OCBC Bank in Singapore.
"We need at least two weeks to know the impact of this new strain on oil demand," he added.
Refinitiv data showed that aggregate margins in Singapore (a measure of Asian refiners' profits) amounted to $2.15 a barrel on
Friday, the lowest since June 30.
Just a month ago, margins peaked at $8.45 a barrel, the highest since September 2019.