EghtesadOnline: OPEC and its allies have achieved the oil-market equivalent of a high-wire act: increasing supply even as demand remains depleted, without crashing prices.
Whether they can successfully continue the balancing act is unclear, Bloomberg reported.
The coalition of producers led by Saudi Arabia and Russia is restoring some of the vast quantities of crude halted during the depths of the coronavirus crisis. So far the supply boost has not derailed oil’s fragile recovery, which has seen prices climb to a five-month high.
But the outlook for fuel demand has deteriorated as the pandemic crushes international travel, and new outbreaks of the disease are weighing on the economic recovery. On Wednesday, key OPEC+ members will meet to consider how to safe-guard their recent success.
Russian Energy Minister Alexander Novak will join an OPEC+ ministers’ video meeting on Wednesday despite testing positive for the novel coronavirus while on a work trip in Russia’s Far East, the energy ministry said on Tuesday.
The Organization of Petroleum Exporting Countries and its partners slashed 9.7 million barrels of daily output earlier this year -- about 10% of global supply -- when global lockdowns inflicted the biggest oil-demand collapse in history.
Their sacrifices paid off, turning around a market that at its trough saw prices in New York crash below zero.
Caption: The outlook for fuel demand has deteriorated as Covid-19 pandemic crushes international travel.