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Oil. Higher and higher?

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Brent has been in a protracted battle since Covid 19 to regain it's 2019 price-point of $55-$65. To do this producers have had to put aside competitive animosity and fundamental political differences for the greater/ their own good. To a great extent this has worked and producers have managed to agree to cut supply in order to regain margins. All well and good.

Naturally, there are going to be rocks in the road to this continued cooperation. One such obstacle is Libya. Another is Venezuela. They are currently unable to produce oil as they are being hampered by inconvenient sanctions (Venezuela) and a nasty little civil war (Libya). However, it is looking more and more likely that Libya will once more become a global supplier in the not too distant future. Libya has lots of oil, it is the largest producer and has the largest  proven reserves of oil in Africa and is on the point of reopening the taps. Global supply is almost balanced with demand, I wonder how OPEC+ members feel about the return of Libya into their club of bonhomie?  Will they be overjoyed to once more compete  with a cash strapped Libya and their gazillions of barrels of oil? The risks are obvious. The Opec+ love in could disassemble and with it the stability in oil price. Covid 19 could return in the fall before it's exit stage left come 2021. A combination event is within reasonable feasibility.  Plus, the world economy will almost certainly be in contraction until 2021 heading off greater demand at the pass. 

It is therefore my humble opinion that oil (Brent) shall not rise inexorably, but trade within a range of $38.5-$47.5 until mid 2021. That's my bias, for what it's worth.

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12 minutes ago, 786Trader said:

To do this producers have had to put aside competitive animosity and fundamental political differences for the greater/ their own good. To a great extent this has worked and producers have managed to agree to cut supply in order to regain margins. All well and good.

Interesting new paradigm.  Maybe cutthroat competition and survival of the fittest isn't the optimal way to organize economies after all?

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