Oil Price: no sign of strong recovery in Asia


weekly oil price

As Saudi Arabia cut oil price for Asian region on the grounds of faltering demand, Reuters reports more bad news for the market.

According to the report, Oil importers in Vietnam have been compelled to offer bonus to retailers to buy oil in order to clear their mounting oil stocks at ports.

The lack of demand is highly correlated to the lack of industrial activity and movement of traffic owing to Covid-19, despite the crisis being handled very well – with fewer than 5 deaths.

If Vietnam, a country that was left relatively unscathed despite being close to the epicentre of the pandemic, China, could not recover fast, analysts believe, the countries that have been badly hit in the region will struggle to revive their economies in the coming months.

Having hit by waves of unpredictable events, the big oil producers in the Middle East will be forced to focus on diversifying their economies while knowing the danger of relying on just one source for generating revenue.

Since the intended objective of the production cut by the OPEC did not materialize, the producers need to come up with an alternative response in the light of post Covid-19 realities.

In the end, it all boils down to the age-old humble truth – seesaw of demand and supply.

 


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