This week’s US-led coordinated strategic petroleum reserve SPR) release has coincided with a development that threatens to pull the rug out from under global demand. Many observers were already nervously watching the return of Covid restrictions in Europe when a new ‘variant of concern’ suddenly hit the headlines on 25 November.
US political discontent with Opec+ had been building in recent weeks over the alliance’s refusal to accelerate the easing of production cuts in order to reverse oil price rises. Opec+ has resolutely stuck to its roadmap of easing the cuts by 400,000 b/d each month, despite the actual production increases being far more gradual, citing expectations of a demand fall in Q1 and the continued risk posed by Covid-19. That Covid caution now looks well founded. (CONTINUED - 1120 WORDS)