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Melbourne — Oil prices were flat on Tuesday ahead of a meeting at which major producers are expected to stick to plans to add supply in February, as soaring Covid-19 cases have yet to spark lockdowns in the biggest fuel-consuming countries.
Brent crude futures gained 1c to $78.99 a barrel at 0239 GMT, while US West Texas Intermediate (WTI) crude futures slipped 2c to $76.06 a barrel. The two benchmark contracts both climbed more than 1% on Monday.
Oil cartel Opec along with Russia and allies — together called Opec+ — are due to meet on Tuesday. The joint ministerial monitoring committee is due to meet at 1200 GMT, followed by a ministerial meeting at 1300 GMT, both by videoconference.
Three Opec+ sources told Reuters the group is likely to stick to its plan to increase output by 400,000 barrels per day in February, as it has done each month since August.
RBC Capital Markets analysts said Opec+ is unlikely to change course given the price outlook, pressure from the administration of US President Joe Biden to boost supply, and no major new Covid-19 mobility curbs.
“Though Omicron cases continue to climb in key geographies, the absence of widespread lockdown restrictions will likely keep near-term demand concerns in check,” RBC analysts said in a note.
However they said Opec+ may have to change tack if tension between the West and Russia over Ukraine flares up and hits fuel supplies, or Iran’s nuclear talks with major powers make progress, which would lead to an end to oil sanctions on Iran.
“We think these two events represent major wild cards that could quickly alter the price trajectory and test Opec’s rapid response mechanism,” RBC analysts said.
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