LONDON (Reuters Breakingviews) – Accurate views on global finance in the Covid-19 era.
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FLU MOVEMENT. OPEC + promises a longer rather than faster economic recovery. The Saudi-led oil cartel agreed with other travelers on Thursday to extend cuts to global oil supplies to the tune of 7 million barrels per day, about 7% of what the world normally eats. With demand due to supply in excess of 400,000 barrels per day this month, according to OPEC + forecasts, the largest fossil fuel producing countries could have opened the taps.
They chose not to draw attention to concerns about the economic prospects. After predicting an OPEC + meeting of an additional 500,000 barrels per day of production, the dramatic restriction pushed crude prices up 5% to their highest price since January 2020, ahead of the pandemic. But in OPEC ‘s eyes, that does not mean that it will return to regularity. Crude prices may have gone up 30% this year, but key economies are still under lock and key. Mobile viral rays and difficult vaccine delivery could delay reopening. Better a poor horse than no horse at all. (By Ed Cropley)
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