OPEC+ agrees to hike oil output following pressure from U.S.

• OPEC+ to increase output by 400,000 barrels per day in January, as decided earlier

• Brent crude futures rose 1.16% at $69.67 per barrel on Thursday

OPEC and its oil producing allies, commonly known as OPEC+, agreed on Thursday to increase output by 400,000 barrels per day in January, as decided earlier.

The alliance, however, said that “the meeting remains in session,” which means they can make immediate changes if the market conditions alter.

The meeting, which was convened via videoconference, focused on oil supply in the market amid fears over the omicron Covid-19 variant.

The alliance also discussed issues such as the release of reserves from crude importing nations led by U.S. and Iran’s comeback into oil markets.

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International benchmark Brent crude futures rose 1.16% at $69.67 per barrel on Thursday, while U.S. West Texas Intermediate futures climbed 1.4% higher at $66.50 per barrel.

Since last Thursday, Brent crude futures had fallen more than $10 due to the emergence of omicron Covid variant. According to WHO, it will take weeks to analyse the impact of the variant on vaccines and diagnostics.

Pressure to increase output

OPEC+ had committed to add 400,000 barrels a month to global supplies after it had cut supplies to nearly 10 million barrels per day last year due to the pandemic.

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The meeting comes after pressure from U.S. on the group to increase supplies because of high oil prices in the country. OPEC+, on the other hand, had been ignoring the demand to increase oil supply in the market.

A week earlier, U.S. President Joe Biden announced the release of oil between the U.S., India, China, Japan, South Korea and the U.K to help cool the market. U.S. decided to release 50 million barrels from the reserve.

Picture Credits: Getty Images