OPEC, allies set for another modest oil output hike

OPEC, allies set for another modest oil output hike

OPEC and its allies are expected on Tuesday to maintain their practice of modestly boosting oil output as the rapidly spreading Omicron variant has so far not heavily hit demand. The OPEC+ grouping, including top producers Saudi Arabia and Russia, has resisted pressure to more widely open the taps as high energy prices are fuelling a surge in inflation across the world. The 13 members of the Organization of the Petroleum Exporting Countries (OPEC) and their 10 allies drastically slashed output in 2020 as the pandemic wreaked havoc with demand. Last year they decided to step it up again gradually as prices recovered, while reviewing the situation every month. Analysts expect the group to step up production by 400, 000 barrels per day in February, as they have done in past months. They approved another increase at their December meeting despite the emergence of Omicron, which had caused prices to fall as markets fretted over its potential impact on the global economy. "Since the last OPEC+ meeting (in early December), oil prices have recovered considerably, suggesting that also market participants seem to be less concerned about the Omicron variant weighing on oil demand," UBS energy strategist Giovanni Staunovo told AFP.