Oil up after Opec+ takes flexible stance on supply

Oil jumped after the Opec+ alliance left the door open to reversing its decision to boost output at any moment, with the impact of the omicron variant on demand remaining highly uncertain.

West Texas Intermediate climbed above $68 a barrel after closing higher on Thursday following the producer group’s decision.

Opec+ agreed to add 400,000 barrels a day of crude to global markets in January, but it essentially put a floor under prices by giving itself the option to change the plan on short notice.

That’s an unusual step that underscores the difficulty in assessing the supplydemand balance over the short term due to the omicron virus variant and the Us-led release of national reserves.

Crude has dropped sharply since late October amid moves by major consuming nations to tap their reserves, the emergence of the new virus variant and a more hawkish Federal Reserve. Some analysts think the declines have been excessive, with Goldman Sachs Group Inc. saying prices have “far overshot” the impact of the omicron variant and Bank of America sticking to its $85-a-barrel forecast in 2022.

“The bottom might have been reached on Thursday, unless we get some bad news on the new variant,” said Giovanni Staunovo, a commodity analyst at UBS Group.