January 3, 2022

Beginning of the New Year, Where Do Oil Prices Go?

 Oil prices maintained their strength in early 2022 trade, with positive support from reports of a reduction in crude oil production by Libya ahead of the OPEC meeting this week.

Most recently, Libya said its oil production would drop by 200,000 barrels a day next week due to efforts being made to repair damage to pipelines.

This brings the total production to 700,000 barrels a day, the lowest level in more than a year.

The announcement was made over the weekend, with only a few days left before the meeting of the world's major oil producers OPEC, and its OPEC+ ally on Tuesday.

Some investors expect OPEC to stick with plans for an addition of 400,000 barrels a day in global production.

Meanwhile, a recent report from the OPEC technical committee found the Omicron variant would only have a mild impact and would not continue.

The underlying OPEC+ scenario sees oil stocks in Organization for Economic Co-operation and Development (OECD) countries below the 2015-2019 average until the fourth quarter of this year.

In the Asian session, Brent crude futures traded positive at around $ 78.30 a barrel, while US WTI traded higher at $ 75.75 a barrel.