OPEC and allied oil-producing countries decided Tuesday to pump more oil to the world economy amid hope that travel and demand for fuel will hold up despite the rapid spread of the omicron variant of COVID-19.
The 23-member OPEC+ alliance led by oil cartel member Saudi Arabia and non-member Russia said it would add 400,000 barrels per day in February, sticking with a road map to slowly restore cuts in output made during the depths of the pandemic.
Oil prices rose with the news: U.S. crude traded 1% higher on the New York Mercantile Exchange, at $76.79 per barrel, while international benchmark Brent crude was up 1.2%, at $79.89 per barrel.
After the first reports about the ultra-contagious omicron variant in late November, oil prices plunged and stocks slid. But prices have since recovered and markets calmed down. Analysts say vehicle traffic and aviation activity suggest that omicron, while it is dominating headlines and raising concerns about hospital capacity, may wind up not drastically reducing demand for fuel.
The production increases are gradually restoring deep reductions made in 2020, when demand for motor and aviation fuel plummeted because of pandemic lockdowns and travel restrictions.