LONDON: Oil prices rose more than 4% on Wednesday, still struggling to recoup losses of more than 16% in November, as major producers prepared to discuss how much of a threat the new Omicron variant of the coronavirus would pose to energy demand.
Brent crude futures for February rose $3.56, or 5.1%, to $72.79 a barrel at 1048 GMT.
US West Texas Intermediate (WTI) crude futures rose $3.25, or 4.9%, to $69.43 a barrel. Both Brent and WTI front-month contracts in November posted their steepest monthly falls in percentage terms since March 2020, down 16% and 21% respectively.
The Organization of the Petroleum Exporting Countries (OPEC) will meet on Wednesday after 1300 GMT and ahead of a meeting on Thursday of OPEC+, which groups OPEC with allies including Russia.
Some analysts expect OPEC+ to pause plans to add 400,000 barrels per day of supply in January in light of the potential hit to demand from travel curbs to rein in the spread of the Omicron variant.
"There is much to suggest that OPEC+ will not initially step up its oil production any further in an effort to maintain current prices at around $70/bbl," PVM analyst Stephen Brennock said.
"OPEC+ have erred on the side of caution since it began slowly boosting supplies and a decision to shelve a planned increase output in January and keep its quota flat comports with its cautious approach."
Several OPEC+ ministers, though, have said there was no need to change course.
Oil climbs over 2% ahead of OPEC meeting amid Omicron concerns
But even if OPEC+ agrees to go ahead with its planned supply increase in January, producers may struggle to add that much.
A Reuters survey found OPEC pumped 27.74 million bpd in November, up 220,000 bpd from the previous month, but that was below the 254,000 bpd increase allowed for OPEC members under the OPEC+ agreement.
In a bearish sign for demand, data from the American Petroleum Institute industry group showed US crude stocks fell by 747,000 barrels in the week ended Nov. 26, according to market sources, a smaller decline than expected.
Government stockpile data is due at 1530 GMT.
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