Oil prices may have tanked in the past 18 months due to weak demand in the face of a supply surplus, but the low prices are likely to spur buying, particularly in Asia, that will help rebalance supply and demand even as the Organization of the Petroleum Exporting Countries (OPEC) sticks with its robust production quota.
“For many Asian nations, current oil prices are welcome in the short term. Indeed, I believe levels of demand will soon reflect the attractiveness of the current prices,” said Saudi Arabia’s oil minister Ali al-Naimi in a statement posted on the International Energy Forum’s website over the weekend.
Crude oil prices have fallen dramatically in the last year-and-a-half and are now below $50 a barrel – half their level this time last year, as OPEC keeps output target at 30 million barrels a day.
The comments by al-Naimi came as China released October trade data, which showed that the major oil importer shipped in 6.3 million barrels of oil a day — a 9.4 percent on-year rise in crude oil imports.
“Crude oil imports should be well supported by the completion of new storage facilities by independent oil players in China, as authorities open up the refining sector,” ANZ analysts said of China in a note. Authorities have recently granted these small refiners, known as “teapots” higher crude oil import quotas in a bid to liberalize the downstream industry
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