According to a document cited by Reuters, OPEC+ sees global oil supply surpluses widening to 2M barrels per day (BPD) in January, to 3.4M BPD in February and then to 3.8M BPD in March. OPEC+ reportedly sees the impact that Omicron related-travel restrictions are having on jet-fuel demand in Europe and Africa. Mobility and transportation fuel demand within Europe may also be affected by the new Covid-19 variant, the document reportedly warns.

Market Reaction

WTI has been ticking lower from earlier session highs in the mid-$69.00s in recent trade, but holds onto on the day gains of about $1.50. The commentary from OPEC+ might increase concerns about the global oil demand outlook, but also increase the chance of OPEC+ proactivity in making sure any projected supply surpluses arent too persistent/weigh on prices too much over the long run.  

OPEC meets on Wednesday at 1300GMT, while OPEC+ is slated to meet at 1300GMT on Thursday. Analysts are expecting the cartel to announce a halt to the recent string of 400K barrel per day per month output hikes.