Oil's Facing Odds of Demand Worsening Before Getting Better - Bloomberg

Oil's Facing Odds of Demand Worsening Before Getting Better - Bloomberg:

Oil’s march back toward a four-year high is now facing some roadblocks in the form of demand in Asia, though the path may clear to allow further gains later this year. 


While the current rally in global benchmark prices to over $71 a barrel will put pressure on government finances in Asia’s import-dependent nations, the level of fiscal stress typically doesn’t determine their crude purchases. Instead, the volume of shipments is influenced by the state of demand for fuel from industries and consumers in the world’s biggest oil-consuming region.

In a discouraging sign for oil bulls, some indicators of consumption such as diesel profit margins have shown signs of weakness recently. That may hamper crude’s rally, which has so far been driven by OPEC’s output cuts and concerns over tight supplies. Still, market watchers see the effect as temporary, and predict fuel demand will rebound later in 2019.