Oil prices dropped more than 4% before rebounding on Thursday after OPEC+ announced it would continue its supply hike of 400,000 barrels per day per month, despite the threat of Omicron variant cases.
Oil analysts had been split on whether the cartel would hold steady with its output hike or pause it amid uncertainty about demand given the threat of the new variant.
West Texas Intermediate (WTI) crude (CL=F) touched $63 a barrel shortly after 9 a.m. ET. By 2 p.m. in the afternoon, future contracts had climbed back up and were trading more than 1.2 % higher, at around $66.40. Brent crude futures were up around 1% around that same time at $69.58.
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Oil has been on a steady decline from its recent highs amid concerns over demand as the markets grappled with the threat of the Omicron variant. Few details are still known about the variant which has been traveling across borders. The CDC confirmed the first case of the variant detected in California on Wednesday
Last Friday, WTI declined 13%. Its worst decline since April 2020 and its biggest daily drop of 2021. Goldman Sachs analysts recently noted the crude sell-off has been overdone.
Peak-to-trough, WTI oil had been off about 25%, though it recovered some of those losses.
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