Saudi Arabia's Oil Recovery Fears Look Well Founded - Bloomberg
It’s starting to look like Saudi Arabia’s concerns over the oil demand recovery were well founded.
At the start of the month, the joint leader of the OPEC+ group of oil-producing countries announced a surprise output cut of 1 million barrels a day for February and March. Its co-chair, Russia, pushing for restraints to be eased, was granted a small output increase in each of those two months.
When Saudi Energy Minister Prince Abdulaziz Bin Salman made the unilateral decision to cut output — keeping the idea from fellow OPEC+ members to prevent leaks — he pinned it on fears that the recovery in oil demand was not as strong as it appeared. That appears to have been wise.
Although cold weather across northern Asia has boosted demand for heating fuels, there are worrying signs that the recovery in transport fuel has not only ground to a halt, but has actually gone into reverse in some key areas.
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