Oil Down, OPEC+ Agrees on February Output Hike but Tight Market Caps Losses By Investing.com

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By Gina Lee

Investing.com – Oil was down on Wednesday morning in Asia, with the Organization of the Petroleum Exporting Countries and allies (OPEC+) keeping its plan to increase supply for February 2022 as the fuel demand outlook brightens.

were down 0.24% to $79.81 by 10:04 PM ET (3:04 AM GMT) and were down 0.22% to $76.83.

As fears over the omicron COVID-19 variant continue to ease, OPEC+ agreed to an increase of a 400,000 barrel-a-day output increase for February on Tuesday. Russian Deputy Prime Minister Alexander Novak told the media that omicron’s spread is not impacting oil demand, thanks to the low level of hospitalizations.

But the cartel might not even hit the agreed number. Russia failed to raise output in December 2021, and fellow OPEC member Libya expects production to fall again this week. OPEC+ analysts also cut the first quarter’s surplus estimate and predicted weaker supply growth from rivals.

The overall supply-demand backdrop looks good for OPEC+, according to some investors.

“Prices are heading higher after OPEC+ showed they are more confident that the global crude demand outlook will only take a limited hit,” OANDA senior market analyst for the Americas Ed Moya told Bloomberg.

Geopolitical risks such as Russia-Ukraine tensions and the revival of the Iran nuclear deal could potentially support a higher oil price, he added.

Meanwhile, Tuesday’s U.S. crude oil supply data from the for the week ended Dec. 31. Forecasts prepared by Investing.com predicted a draw of 3.400 million barrels, while a draw of 3.090 million barrels was recorded during the previous week.

Investors now await crude oil supply data from the , due later in the day.

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