Oil prices have risen by 10 percent since the end of 2020 and 8 percent since the OPEC+ meeting two weeks ago, but the rally has nothing to do with the short-term oil demand outlook. It has been almost exclusively due to the decision of Saudi Arabia—the world’s top oil exporter and OPEC’s de facto leader—to cut an additional 1 million barrels per day (bpd) from its production in the first quarter. Saudi Arabia, as well as major forecasters, expected oil demand in Q1 to continue to struggle as major economies in Europe and now parts of China are under renewed lockdowns to fight the spread of COVID-19. “Wonderful Surprise” The Kingdom’s “wonderful surprise” to the oil industry, as its Energy Minister Prince Abdulaziz bin Salman described the extra cut in a Bloomberg interview, lent support to oil prices while the outlook for Q1 demand continues to deteriorate, due […]