OPEC increases oil production despite worries about Omikron variant

This was reported by OPEC+, as the alliance is called. Oil prices plunged into the red after the reports.

Keep a close eye on the oil market

OPEC+ will increase production by 400,000 barrels per day next month, just like in recent months. Analysts speculated that OPEC+ could abandon its planned production increase from Omikron as new travel restrictions and weaker economic growth could hit oil demand.

The group of oil countries said in a statement that rapid adjustments could be made to production, depending on developments around Omikron. OPEC+ says it will continue to monitor the oil market closely.

Last year, OPEC+ cut production very hard due to the corona crisis and sharply falling oil prices. Production was cut by as much as 10 million barrels per day, representing nearly 10 percent of total global supply.

More oil, prices down

Since then, production has gradually increased again, although it is still well below the level before the virus outbreak. The aim is to reach that level again by the end of next year.

Now that the OPEC+ countries are going to pump up more oil, the oil price will fall, Hans van Cleef, oil expert at ABN Amro, told RTL Z earlier today. “That will certainly be the case if the oversupply increases even further in the first quarter. “

A lower oil price will benefit countries that import oil, says Van Cleef. For example, it will reduce inflation, which has risen sharply lately, and it is good for consumers if the prices of things in the store rise less quickly.

If the oil price falls, the price of petrol will also fall, according to Van Cleef. Although excise duties and VAT determine a large part of the price at the pump, the oil price naturally plays a major role in the direction of the price of petrol and diesel.

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