FX.co ★ Oil market in euphoria: OPEC+ decision pushed quotes to record growth

At the auction on Tuesday, the price of oil updated the 6-week maximum value levels. The reason for the bright rise in black gold quotes was the results of the OPEC+ meeting. The alliance members agreed to adhere to the planned increase in oil production.

Thus, the cost of a barrel of oil increased by 1.3%. Brent crossed the $80 mark for the first time since the end of autumn, when oil quotes collapsed amid concerns about the Omicron strain. Meanwhile, February WTI futures increased by 1.2% to $76.99 per barrel.

On Tuesday, the ministerial video conference of the OPEC+ alliance ended, following which the members of the international organization approved an increase in black gold production in February by 400,000 barrels per day. At the same time, OPEC+ left technical possibilities for an instant resumption of the meeting in the event of a deterioration in the epidemiological situation due to the coronavirus pandemic.

The next meeting of OPEC+ member states is scheduled for February 2.

Experts are confident that the decision taken the day before to increase production indicates that the allied countries still believe in further growth in oil demand, despite the new COVID-19 strain. According to the latest information from the world media, Omicron causes fewer deaths and contributes to the rapid development of immunity. The combination of these factors can have a limited impact on demand.

At the same time, market analysts say that the main risks for the black gold market are still related to the supply prospects.

There is also an open question about the prospect of lifting sanctions for Iran. In this case, Iranian oil will return to the world market, which can put downward pressure on black gold quotes.