Is the coronavirus recession over? OPEC oil producers hope so, and so does Russia. Key members of OPEC today have agreed with Russia that it's safe to once again open their spigots and let the oil flow a bit more freely, The Wall Street Journal has reported.

It's been four months now since a price war broke out between OPEC and its most famous nonmember, Russia, exacerbating a precipitous oil-price decline in the face of the COVID-19 pandemic. By April, producers realized their mistake and began cutting back on production.

Oil drill

Image source: Getty Images.

April's oil production cutback, a move led by Saudi Arabia, reduced OPEC's production by a total of about 9.7 million barrels per day (b/d). Today's agreement between OPEC and Russia rolls back that cutback by only 1.6 billion b/d, starting in August.

(Technically, the agreement is to increase production by 2 million b/d, but because some countries have been breaking the rules and overproducing already, OPEC will require those nations to cut their output by 400,000 b/d, subtracting that figure from the overall target of a 2 million b/d increase.)

The Journal report noted that as lockdowns to contain the spread of coronavirus expire, demand for oil is growing again, making it possible to increase production a bit without flooding the market and driving oil prices lower. A Friday report from the International Energy Agency echoed this view, predicting a slow recovery in oil demand in the second half of this year.

OPEC itself predicts that average oil demand this year will be 8.9 million b/d less than in 2019, but rebound by 7 million b/d in 2021.

Digesting all this news, oil investors sent the price of Brent crude and U.S. West Texas Intermediate up more than 2%.