Areas of increased demand for oil are emerging as suppliers, lead by Saudi Arabia, cut additional output in hopes of boosting crude’s price, according to reports.
Pockets of demand are starting to emerge in India and China, according to Bloomberg Quint, and while a significant global glut remains, the increase in global stockpiles is beginning to slow down. To accelerate that process, Saudi Arabia said on Monday that it would slash an additional 1 million barrels of production, prompting smaller additional reductions from OPEC allies the United Arab Emirates and Kuwait.
Prince Abdulaziz bin Salman.
Oil is still down by 60% this year after a one-two punch of an oil price war between Russia and Saudi Arabia, combined with a global economic slowdown triggered by the Coronavirus, has sent supplies overflowing and demand significantly lower.
State-owned Saudi Aramco reported a 25% fall in net income for the first quarter on Tuesday, CNBC reports, but the company said it would uphold its dividend commitment, saying it would pay a dividend of $18.75 billion in the first quarter, despite the fall in profit. The company said net income slid to 62.5 billion riyals ($16.6 billion) in the first three months of the year, down from 83.3 billion riyals over the same period in 2019, according to CNBC.
Producers are hopeful that demand in the United States and other Western nations would rebound in the weeks and months ahead as governments scale back lockdown measures aimed at curbing the spread of the Coronavirus. Gasoline demand in the U.S. started to improve last week.
