OPEC postponed its regular meeting to Thursday this week to consider the impact of the Omicron variant. Oil prices recovered after the sell-off last weekend.
The Organization of the Petroleum Producing Countries (OPEC) postponed a technical meeting this week to assess the impact of the Omicron variant on the outlook for oil demand. At the time of writing, Brent oil was moving at around $75.46 per barrel, up 2.73 percent on a daily basis. Meanwhile, WTI oil was in the range of $72.07 per barrel or up 4.92 percent from the daily open price.
Technically, oil prices are trying to recover from a slump of more than 10 percent last weekend. The sharp decline in black gold was further exacerbated by low liquidity in connection with the Thanksgiving holiday in the US.
The emergence of vaccine-resistant Omicron triggered a sell-off against risky assets including crude oil. This situation underlies OPEC to postpone this week's meeting schedule from Tuesday to Thursday.
"We need more time to understand the impact of the Omicron variant, so that we can finally decide what action to take, whether or not special handling is needed (in response to the emergence of Omicron)," said one trusted OPEC source.
In recent months, OPEC has gradually increased supply by as much as 400,000 barrels per day (bpd) to restore output after cuts of up to 10 million bpd due to the pandemic. However, the emergence of this Omicron variant has the potential to trigger an evaluation of the policy.
Separately, vaccine maker BioNTech Pfizer said it could take up to 100 days to develop a new vaccine if the Omicron variant is truly immune to the currently available vaccine. However, BioNTech itself has previously confirmed that it will provide confirmation regarding the need for a new vaccine within the next 2 weeks.
Analysts predict that future oil prices will still be overshadowed by the uncertainty of the Omicron variant which has now been detected in many countries such as the UK, Germany, Australia and Hong Kong. Oil prices have the potential to be depressed again if the Omicron variant spreads and many countries impose travel restrictions.
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