Oil prices are up sharply as ministers of the Organization of Petroleum Exporting Countries (OPEC) prepare to meet amid ongoing market volatility.
Prices for West Texas Intermediate (WTI) crude oil rallied as much as 4.6% after losing almost $4 U.S. a barrel yesterday (November 30). That selloff was driven by escalating concerns over the impact on demand of the Omicron variant of COVID-19 and prospects for a faster tapering of stimulus by the U.S. Federal Reserve.
The focus now shifts to the reaction from producers. OPEC and its allies (OPEC+) meet over the next few days (December 1-2) to set output policy, with some analysts expecting the group to pause supply hikes.
The U.S. frustrated OPEC+ last week by announcing a release from its strategic oil reserves, although America has since moved to cool tensions with Saudi Arabia.
WTI for January rose 4.2% to $68.93 U.S. a barrel in London trading. Brent crude oil for February settlement climbed 4.5% to $72.31 U.S. a barrel.
Oil’s volatility has spiked, with WTI closing down 13% at the end of last week before climbing on Monday and slumping again on Tuesday of this week. Gauges of swings in both WTI and Brent crude oil are at their highest level since May 2020.
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