What caused the Oil price rise?

Oil prices rose on Friday. It extended gains after OPEC+ said it would review supply additions before the group’s next scheduled meeting if the Omicron variant depresses demand. Nonetheless, prices fell for the sixth week in a row.

Brent crude futures were up $1.34, or 1.9 percent, to $71.01 per barrel at 0752 GMT. This came after rising 1.2 percent the previous session.

WTI crude futures in the United States rose $1.38, or 2.1 percent, to $67.88 a barrel. They added to a 1.4 percent gain on Thursday.

OPEC+

Organization of the Petroleum Exporting Countries, Russia, and allies, known as OPEC+, surprised the market on Thursday by sticking to its plans to add 400,000 barrels per day (BPD) of supply in January. However, the producers left the door open too quickly, changing policy if demand harm due to measures to control the spread of the Omicron coronavirus variant. They agreed to meet again before their next scheduled meeting on January 4, if necessary.

Traders were hesitant to bet against the group, prices increased, eventually halting production increases.

According to Ann-Louise Hittle of Wood Mackenzie, it makes sense for OPEC+ to stick with their policy for the time being because it is still unclear how mild or severe Omicron will be compared to previous variants. The appearance of Omicron and speculation that it could spark new lockdowns, dent fuel demand, and prompt OPEC+ to postpone output increases has roiled the market all week.

Brent set to end the week down about 2.4 percent. Meanwhile, WTI set to fall 0.4 percent. Both are heading lower for the sixth week in a row for the first time since November 2018.

The market decline implied an “excessive” hit to demand. In contrast, global mobility data, excluding China, showed that mobility is continuing to recover. It averageed at 93 percent of 2019 levels last week.