OPEC+ agreed on Jan. 4 to stick to its planned increase in oil output for February because it expects the Omicron coronavirus variant to have a short-lived impact on global energy demand.
The group of producers comprising OPEC and allies including Russia has raised its output target each month since August by 400,000 bbl/d.
The U.S. has urged the group to pump more crude to help the global economic recovery from the pandemic and cool prices as they trade near $80/bbl. But the group has said the market did not require extra oil.
OPEC+ is unwinding record production cuts of 10 million bbl/d, which were imposed in 2020, as demand and prices recover from their pandemic-induced slump.
Brent crude rose 50% last year and has rallied so far in 2022, trading 2% up above $80 on Tuesday.
Current plans would see OPEC+ again raise the target by 400,000 bbl/d for February, leaving about 3 million bbl/d in cuts to unwind by September, in line with an agreement last July.
In a technical report seen by Reuters on Jan. 2, OPEC+ played down the impact on demand of the Omicron variant, saying it would be "mild and short-lived" and was upbeat about economic prospects.
"This is in addition to a steady economic outlook in both the advanced and emerging economies," the Joint Technical Committee report said.
Rystad Energy’s analyst Bjornar Tonhaugen said OPEC+ has grown confident in part because real-time transportation data globally suggests Omicron has not yet had any significant impact on oil demand.
"Ongoing [oil production] outages in Libya, struggling production recovery in Nigeria, and reduced expectations for Russian production capacity add bullish weight to the scale from the supply side," he added.
While OPEC+ has increased its output target each month, actual production has lagged as some members struggle with capacity constraints.
OPEC+ producers missed their targets by 730,000 bbl/d in October and by 650,000 bbl/d in November, the International Energy Agency said last month.
OPEC+ will hold its next meeting on Feb. 2.
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