Saudi Arabia’s unexpected major oil production cut announced on Tuesday is likely a sign that the world’s largest oil exporter expects oil demand to weaken in coming weeks due to the renewed strict lockdowns in major economies, Goldman Sachs says. After the two-day OPEC+ ministerial meeting reached a compromise on production levels for February—giving Russia and Kazakhstan a combined 75,000 bpd increase in production in February—Saudi Arabia, the biggest producer and de facto leader of OPEC, announced it would voluntarily cut its crude oil production by 1 million barrels per day (bpd) beyond its quota over the next two months. According to a note from Goldman Sachs, the move from the Saudis is indeed surprising, and while it will support oil prices in the near term, it also signals that the Kingdom expects weakening oil demand in the first quarter of 2021. “Despite this bullish supply agreement, we believe […]