With the International Energy Agency all set to publish its first forecast of oil market balances in 2020 on Friday, forecasts reveal that the oil demand growth may slip below 1 million barrels in a day in the upcoming months; it is the lowest since 2011.
The growing signs of demand growth turning much weaker can result in making deeper cuts. And if it happens so it may potentially end the oil policy between the duo of Saudi Arabia and Russia.
While the production restraint agreed in November and December 2016 by Organization of Petroleum Exporting Countries, Russia was the only country to offer voluntary reduction to bring global supply and demand into balance during the first six months of 2017 but failed to make it happen yet. As the reports show that the oil consumption increased at an average rate of 1.4 per year from 2017 through 2019.
According to the reports the demand is slowing year- on-year across March and April for the early reporting countries which includes China, India and the US. This is worrying the International Energy Agency because these primarily account to the 70% world’s oil demand this year.
Russian President, Vladimir Putin said “The countries have certain differences in opinion regarding the fair price for the crude” and the Russian leads said $60-65 a barrel-which is around the current level- “suits us just fine.” The Russian president may ask oil companies to make deeper cuts to support prices.