Saudi Arabia appears to be taking its outpu cuts seriously and is filling the role of swing producer in OPEC. Tanker loading indicated crude oil production of a bit above 8.0 million bpd. in Saudi Arabia. Qatar, Kuwait, and the UAE have also cut loading schedules for February in line with their OPEC output targets. This, combined with unexpected compliance from Venezuela, appears to be having some success in supporting the oil price.
Still, US demand continues to weaken and the price of oil in the short and medium term will remain driven by the gloabl economy.
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Some analyst believe that oil demand has reached its peak and therefore most likely even after recession is over we would be expecting the price to go up any time soon, what your opinion and what do you think would be the implications?
We believe in the peak oil theory, however even in structural long term moves there are cyclical short term moves that can occur in the opposite direction.
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