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OPEC+ monitoring new virus variant, some concerned over outlook - sources

OPEC postpones technical meetings to evaluate Omicron impact -Bloomberg News
OPEC postpones technical meetings to evaluate Omicron impact -Bloomberg News   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Alex Lawler, Ahmad Ghaddar and Vladimir Soldatkin</p> <p><span class="caps">LONDON</span>/MOSCOW -<span class="caps">OPEC</span>+ is monitoring developments around the new coronavirus variant, sources said on Friday, with some expressing concern that it may worsen the oil market outlook less than a week before a meeting to set policy.</p> <p>The Organization of the Petroleum Exporting Countries and allies, known as <span class="caps">OPEC</span>+, is already facing a release of oil stocks led by the United States to try to cool prices. Still, a source said Russia, a key <span class="caps">OPEC</span>+ member, was not concerned about the virus variant yet.</p> <p><span class="caps">OPEC</span>+ has resisted U.S. calls to do more to lower oil prices, continuing to unwind last year’s record output curbs by adding 400,000 barrels of supply per day every month since August. Next week’s meeting will discuss January’s output.</p> <p>Global authorities reacted with alarm to news of the B.1.1.529 variant, with the EU, Britain and India among those announcing stricter border controls. Oil plunged more than 10%, the largest one-day drop since April 2020. [O/R]</p> <p>“Not good as it adds bearishness to an already weak outlook,” said an <span class="caps">OPEC</span> delegate about the new variant, asking not to be identified. Another said this could be the case, although it was too early to say.</p> <p><span class="caps">OPEC</span>+ meets on Dec. 2 to decide output policy. Another source said the group would assess the significance of the variant for the market. </p> <p>Sources have said that an <span class="caps">OPEC</span> panel which advises ministers and met this week sees the U.S.-led oil stocks release as increasing the supply excess that <span class="caps">OPEC</span> has already warned of next year.</p> <p>Another <span class="caps">OPEC</span> delegate, while noting the slide in oil prices on Friday, said it was not yet clear how significant an impact the variant would have. Oil demand has been recovering and is expected by <span class="caps">OPEC</span> to return to the pre-pandemic rate of 100 million bpd in 2022. [OPEC/M]</p> <p>“I am very concerned,” he said. “There are many unknowns at the moment.”</p> <p>Prior to Friday, <span class="caps">OPEC</span>+ sources said the group had not discussed pausing their planned output hike in January. Iraq said on Thursday <span class="caps">OPEC</span>+ should stick to its existing plan. </p> <p>A source familiar with Russian thinking on Friday downplayed the variant. </p> <p>“I believe that the panic on the market because of the new <span class="caps">COVID</span> version should calm down,” the source said. “The <span class="caps">OPEC</span>+ participants should…not chase after the speculators.”</p> </div>