Photographer: Andrey Rudakov/Bloomberg

At the best of times, OPEC’s management of the oil market is like flying a plane wearing boxing gloves. In recent years, more pilots have crowded into the cockpit. Then, in 2020, one of the wings fell off as Covid-19 ravaged oil demand.

All of which means, despite the apparent dissent in the ranks during the weekend, OPEC+ has no choice but to stay its hand on raising production. To recap, the issue on the table at the conclave kicking off Monday in Vienna is whether to unwind soon an additional 1.9 million barrels a day of the deep supply cuts agreed (with much arm-twisting) in the spring. The idea at the time was to taper the cuts as the scourge of Covid-19 passed and oil demand rebounded.

Nothing is ever that clear cut in the oil market, and that counts for double when a pandemic is involved. The recent rally in oil futures got underway earlier this month with the first announcement of promising preliminary trial results for a vaccine. Further successes on this front have only bolstered confidence on the part of many that Covid-19 will be under control soon.

Yet for OPEC+, the decision on what to do with its supply cuts is a bit like the decision faced by many on what do with masks, family gatherings and so forth. Everyone is tired of restrictions and can see the sunlit uplands of mass vaccination on the horizon. But we aren’t there yet, and the relentless rise in cases and deaths in the U.S. and Europe are warning us to keep up the regimen of 2020 for just a few months longer. If we don’t — as may well have happened with U.S. travel over Thanksgiving — the valley before we reach those uplands is likely to be frighteningly deep.





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