By Gina Lee
Investing.com – Oil was up on Tuesday morning in Asia, but moves were small ahead of a major producers' meeting to discuss plans to add supply in February 2022. Meanwhile, the fuel demand outlook remained optimistic as the rising number of COVID-19 cases globally has yet to spark tightened restrictive measures in the biggest fuel-consuming countries.
Brent oil futures were up 0.29% to $79.21 by 10:49 PM ET (3:49 AM GMT) and WTI futures were up 0.22% to $76.25. Both Brent and WTI futures jumped more than 1% on Monday.
The Organization of the Petroleum Exporting Countries (OPEC), and allies, together called OPEC+, will meet later in the day. The Joint Ministerial Monitoring Committee will meet at 1200 GMT, followed by a ministerial meeting an hour later, all taking place virtually.
The cartel is likely to stick to its plan to increase output by 400,000 barrels per day in February, as it has done each month since August 2021, according to Reuters.
OPEC+ is unlikely to change course given the current price outlook, pressure from U.S. President Joe Biden’s administration to boost supply, and no major new COVID-19 mobility curbs, RCB analysts said in a note.
"Although the omicron COVID-19 variant continues to spread in key geographies, the absence of widespread lockdown restrictions will likely keep near-term demand concerns in check."
However, the cartel could be forced to change its positions if tensions between Western powers and Russia over Ukraine flare up and hit fuel supplies. Progress in nuclear talks between Iran and major powers progress, leading to an end to oil sanctions on Iran, could also alter OPEC+’s plans.
"We think these two events represent major wildcards that could quickly alter the price trajectory and test OPEC's rapid response mechanism," said the RBC note.
Investors also await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.