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Opinion
Julian Lee

Oil Prices Are Only Going in One Direction

Fresh Covid-19 lockdowns are likely to reverse an already stalling recovery in oil demand, just as the U.S. and Libya pump more crude.

Traffic on London streets fell sharply as England entered a four-week lockdown.

Traffic on London streets fell sharply as England entered a four-week lockdown.

Photographer: Dan Kitwood/Getty Images

This was supposed to be a time when things were getting closer to normal for OPEC. A recovery in oil demand after the first wave of the pandemic, coupled with a deep slump in U.S. production, was meant to leave the world needing more of its members’ crude. But it isn’t turning out like that.

Two things have conspired against the Organization of Petroleum Exporting Countries. The coronavirus outbreak is threatening to put an already stalling recovery in oil demand into reverse. At the same time, supply is rising from a variety of sources over which it has no control.