Oil Heavyweights #SaudiArabia, Russia Look Ready for a Showdown - Bloomberg

Oil Heavyweights Saudi Arabia, Russia Look Ready for a Showdown - Bloomberg:

Oil producers could be set for another showdown before the end of the year, with heavyweights Saudi Arabia and Russia holding different views on how to approach the halting recovery in oil demand. 

Renewed restrictions on travel and social gatherings across Europe, along with the tapering of state support packages for companies, are having a chilling effect on demand for crude, just as the OPEC+ group of oil producers, who cut production by a record 9.7 million barrels a day in May, begin to contemplate the next easing of limits on their output. We should all remember what happened last time they couldn’t agree on what to do. 

The International Energy Agency and the Organization of Petroleum Exporting Countries have both resumed cutting their forecasts for this year’s oil demand. In the past two months, the IEA has trimmed its forecast by 400,000 barrels a day, while OPEC has reduced its own by 500,000 barrels. And they may have further yet to fall. Neil Atkinson, the IEA’s Head of Oil Industry and Markets Division, said at a Bloomberg event on Thursday that the agency is “more likely to make a downgrade than an upgrade” to demand forecasts in its next monthly report.

The biggest headwind to oil demand comes from reduced trade, weakened economies and the knock-on effects of business closings and job losses, Standard Chartered analysts, including Emily Ashford and Paul Horsnell, said in a report last week.