Opec and allies agree to boost oil output as Omicron concerns ebb

Opec and allies agree to boost oil output as Omicron concerns ebb

Opec and its allies agreed on Tuesday to boost oil output for the seventh consecutive month in a sign the cartel views the spread of the Omicron coronavirus variant as unlikely to substantially dent demand.

The Opec+ group, which has included Russia since 2016, said it would increase production by another 400,000 barrels a day in February, continuing with the monthly plan agreed in July to gradually replace output cut at the start of the pandemic.

Large oil consumers including the US, India and Japan regularly called on Opec+ last year to increase production at a more rapid rate, fearful that energy cost inflation could derail their economic recovery. But the cartel has consistently stuck with its plan of more gradual output rises.

“[Opec] has stayed steady with their policy despite all this uncertainty,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.

Croft added that, despite soaring coronavirus infections globally, the spread of Omicron appeared to have had less effect on oil consumption than feared. “Governments have shown that they are really reluctant to bring back deeply unpopular mobility restrictions, so the demand impact has been fairly contained.”

Oil prices rose marginally on Tuesday as many traders returned to work after