Oil Prices Surge Above $80 After OPEC+ Decides To Increase Production To 400,000 Barrels Per Day (BPD) In February And U.S. Celebrates

US Celebrates OPEC+ Decision to Continue Increasing Oil Production and Add 400,000 Barrels Per Day (bpd) in February

The price of oil soared on Tuesday (11/04) to $80 per barrel, its highest level since November. The spike occurred after OPEC+ agreed to maintain the planned production increase for February based on indications that the Omicron coronavirus variant would have only a mild impact on demand.

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Brent rose $1.02, or 1.3%, to $80 per barrel, almost back to the level it was at on November 26, when reports of the new variant first emerged, triggering a drop of over 10% in prices that day.

Meanwhile, the price of oil in the US (WTI) rose $0.91, or 1.2%, to $76.99.

White House Welcomes OPEC+ Decision to Continue Increasing Oil Production and Add 400,000 Barrels Per Day (bpd) in February

According to Rystad Energy’s head of oil markets, Bjornar Tonhaugen, “the oil market is up today as a result of the optimism stemming from the monthly OPEC+ meeting, which is helping oil prices to rise,” he said.

Four OPEC+ sources told Reuters that the group agreed, in its meeting on Tuesday (4), to add 400,000 barrels per day (bpd) to production in February, because it expects the Omicron variant to have a short-lived impact on demand.

Its decision reflects a relief from concerns about a significant surplus in the first quarter, as well as the desire to provide consistent guidance to the market. 

The White House welcomed OPEC+’s decision to continue increasing production, which will help facilitate economic recovery, a spokesperson said. 

“It seems that the market is betting that Omicron is the beginning of the end of COVID-19,” said Scott Shelton, energy specialist at United ICAP.