Oil prices rebounded on Monday on optimism that the Organization of Petroleum Exporting Countries (OPEC) may suspend production in response to the spread of Omicron.
Prices jumped over 5 percent as investors looked for bargains, recovering from Friday’s slump that saw the biggest one-day fall since the early days of the coronavirus pandemic.
Brent crude oil futures gained 4.55 percent to $76.03 per barrel (bbl). West Texas Intermediate (WTI) advanced 5.18 percent to $71.68/bbl. Both contracts had tumbled more than $10/bbl in the previous trading session.
There are worries that Omicron, labeled a “variant of concern” by the World Health Organization, can potentially hurt oil demand leading to a supply surplus in the first quarter.
Despite growing travel restrictions, cases of the new COVID-variant have been found in Australia, Belgium, Botswana, Britain, Canada, Denmark, Germany, Hong Kong, Israel, Italy, the Netherlands, France, and South Africa.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) has also delayed its meeting scheduled on Tuesday to Thursday to give itself more time to assess the situation. It is expected that a policy decision will be announced on the planned 400,000 barrel-a-day production increase.
According to analysts, the group can delay the increase as it evaluates the potential impact on demand from the rising new lockdowns. The group had been slowly ramping up supply after slashing it last year during the coronavirus pandemic.