Saudi Oil-Market Pessimism Vindicated as Demand Risks Grow - Bloomberg
For Saudi Arabia, bad news in the oil market has rarely been such a vindication.
Two weeks ago, the world’s biggest crude exporter stunned energy traders by announcing that -- rather than restore halted production as planned -- it would slash supplies by a further 1 million barrels a day.
The resurgent pandemic necessitated “preemptive” action to protect the oil recovery, said the kingdom’s Energy Minister Prince Abdulaziz bin Salman. That ran counter to the view of Saudi’s OPEC+ ally, Russia, but since then plenty of evidence has emerged that Riyadh made the right call.
On Tuesday, the International Energy Agency slashed forecasts for world oil demand in the first quarter as countries hunker down to contain new coronavirus outbreaks. China, which has powered crude’s recovery until now, is locking down cities again and discouraging travel over the Lunar New Year holidays.
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