Oil prices rose on Thursday, more than recouping the previous day's losses as investors adjusted ahead of OPEC + 's supply policy decision, but gains were capped amid concerns that the Omicron variant of the coronavirus would hurt fuel demand.

 

Brent crude futures are up $ 1.24, or 1.8%, to $ 70.11 by 0748 GMT, easing 0.5% in the previous session.

 

US West Texas Intermediate (WTI) crude oil futures rose $ 1.13, or 1.7%, to $ 66.70 a barrel after falling 0.9% on Wednesday.

 

“Investors have boosted their positions ahead of the OPEC + decision as oil prices have declined so quickly and so strongly over the past week,” said Tsuyoshi Ueno, senior economist at the NLI Research Institute.

 

World oil prices have lost more than $ 10 a barrel since last Thursday, when Omicron news first shocked investors.

 

“The market will closely follow the decision of the producer group, as well as the comments of some key members after the meeting, to propose their future policy,” Ueno said.

 

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC +, are likely to decide on Thursday whether to release more oil to the market, as previously planned, or restrict supplies.

 

Since August, the group has added an additional 400,000 barrels per day to global supply every month as it gradually crushes record cuts agreed in 2020.

 

The new option, however, has complicated the decision-making process, and some observers suggest that OPEC + may suspend these additions in January in an attempt to slow supply growth.

 

"Oil prices have risen as some investors expect OPEC + to decide to maintain current supply levels in January to mitigate any damage to demand from the spread of Omicron," said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.

 

Concerns about the impact of the Omicron variant of the coronavirus have increased since the first case was reported in the United States and Japan's central bank warned of economic trouble as countries respond with tighter containment measures.

 

US Undersecretary for Energy David Turk said the administration of President Joe Biden could adjust the timing of the planned release of strategic crude oil reserves if world energy prices fall significantly.

 

Growth in oil markets was restrained on Thursday as weekly US stocks data showed that US crude stocks fell less-than-expected last week, while gasoline and distillate stocks rose much more-than-expected as demand has weakened.

 

Crude oil inventories are down 910,000 barrels in the week to November 26, the Energy Information Administration (EIA) said, compared to analysts' expectations in a Reuters poll of 1.2 million barrels.