Oil prices go up by more than 3% ahead of OPEC meeting

Oil prices climbed more than 3% in morning trading on Wednesday, recouping some of the sharp losses from the previous session ahead of the OPEC meeting, where major producers will discuss how to respond to the threat of a drop in fuel demand due to a new strain of Omicron, Investing.com reported.

Brent futures jumped up by 3.51% to $71.66 per barrel by 8:23 am Kyiv time, WTI– by 3.29% to $68.36 per barrel.

The Organization of the Petroleum Exporting Countries (OPEC) will hold a meeting on Wednesday, and an OPEC+ meeting is scheduled for Thursday, which brings together OPEC and partners.

Some analysts expect OPEC+ to suspend a 400.000 bpd increase in supplies in January in light of a potential hit to demand from travel restrictions to curb the spread of the omicron strain, although several OPEC+ ministers say there is no need to change course.

“As (the US and other countries) have agreed to open emergency reserves to contain price increases ... and as prices have already adjusted from $ 85 a barrel to nearly $70, OPEC+ may rethink its strategy,” said Sunil Katke of Kotak Securities.

"The likelihood of this exists given the new variant of the coronavirus and its impact on global demand, especially in the aviation sector."