OPEC+ Likely to Boost Oil Output Without Undoing 2020 Gains

As one of the most tumultuous years in oil’s history ends, a delicate task now confronts OPEC+.
The alliance of producers led by Saudi Arabia and Russia must decide whether it can continue to restore crude supplies without capsizing the price recovery they spent most of 2020 working to achieve, Bloomberg reported.
Moscow believes that the group -- which slashed output during the pandemic -- can revive another 500,000 barrels a day of idle capacity in February, on top of an increase scheduled for this month. Riyadh, which has favored greater caution, is keeping its own views under wraps.
“It feels like OPEC+ is trying to steer a giant oil tanker through a narrow strait,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.
Whatever they ultimately decide, the Organization of Petroleum Exporting Countries and its partners are leaving nothing to chance.
With its Jan. 4 gathering, the coalition is switching to meeting every month -- rather than just a few times a year -- in order to fine-tune production levels more precisely.
After the brutal lessons delivered over the past 12 months, the impulse to micro-manage is understandable. Last year’s challenges for OPEC+ began in February, when oil demand in China collapsed 20% as the world’s biggest importer locked down to beat the emerging coronavirus.
Riyadh and Moscow then clashed over how to respond to the demand shock, a dispute that shattered the 23-nation alliance and ushered in a vicious price war. By April, the world was so awash in crude that US futures traded below zero for the first time in history.