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Julian Lee

Oil’s Recovery Is Too Fast for Its Own Good

Crude prices are testing $60 a barrel with OPEC holding the line on output cuts. That doesn’t bode well for tensions between Saudi Arabia and Russia.

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Photographer: Karo Kes/iStockphoto

The OPEC+ alliance of oil producers will face a big test of its cohesion in a few weeks’ time, when ministers meet to discuss the next step in their historic production deal aimed at rebalancing the world’s oil supply with recovering demand. Things have almost moved too quickly in their favor.

Recent increases in crude prices and the rapid drawing down of visible stockpiles will undoubtedly lead to calls for a more rapid raising of production targets than was envisaged in December. That may well reignite tensions between the co-leaders of the group, Saudi Arabia and Russia, with the potential for more brinkmanship that could undermine the price recovery.