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Spread of new COVID-19 variant has no impact on oil market yet — Russian deputy PM

The new coronavirus variant Omicron is not currently affecting demand for oil due to the lower hospitalization rate, so the OPEC+ countries decided not to change the deal parameters approved earlier, Russian Deputy prime Minister Alexander Novak said in a televised interview with Rossiya-24 news channel on Tuesday.

“We presume that there are still uncertainties related to the spread of Omicron strain. Nevertheless, the monitoring and analysis prove that despite the surge in cases, the hospitalization rates are quite low, and it is not affecting demand reduction. So we believe that we need to remain compliant with our commitments which OPEC+ made to increase output,” he said.

Novak pointed out that the Technical Committee of the Organization of the Petroleum Exporting Countries (OPEC), Russia and some other countries, which are called OPEC+, had considered three options for the market situation in 2022: negative, optimistic and basic.

“It was decided, and supported by all the countries it, that the output would be increased by 400,000 barrels per day in February,” he added.

According to the Russian deputy prime minister, the Ministerial Meeting also touched upon the implementation of the deal.

“Last November, it was at a historical level of 122%, in other words, higher than expected. This is a good indicator,” Novak said.

Tuesday’s OPEC and non-OPEC Ministerial Meeting lasted half an hour to approve the output increase by 400,000 barrels per day for February.

OPEC+ oil exporters presume that the oil market is currently balanced, according to conclusions of the Joint Ministerial Monitoring Committee, made available to TASS on Tuesday. However, they expect the market to shift toward surplus and oil inventories to grow after Quarter 1 of 2022.

In February, OPEC+ countries will cut output by only 2.959 million barrels per day, but not by 9.5 million barrels per day as in May 2020.
Source: TASS

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