Oil Demand Not Roaring Back Yet

It was too good to be true. Last weekend’s OPEC+ meeting took a decision in record time to extend deep output cuts that had halted a dramatic slide in prices — and members even agreed to abide by them. 
The timing was perfect. The deal would keep oil from flooding the market, allowing time for demand to recover as economies around the world fire back up after draconian coronavirus lockdowns. 
Yet oil prices aren’t recovering as the bulls had hoped. Yes, there is a rebalancing of supply and demand in the offing, but consumption hasn’t picked up quite as much as they hoped it would by now, Bloomberg reported.
A rally that briefly took West Texas Intermediate crude above $40 a barrel in the first week of June has fizzled out, as the euphoria of exiting lockdown is replaced by the reality of living with this virus. 
Around the world, it’s become clear that getting back to work and play will be halting. In the US, there are now fears a resurgence of Covid-19 infections in some places could force a reversal of reopenings. And new weekly data show record levels of inventories in US stockpiles. 
It wasn’t supposed to be this way. Output cuts were meant to start draining inventories, while the reopening of stores, factories and businesses boosted demand. Instead, things seem to be going in the opposite direction.
The US Energy Information Administration’s outlook for global oil demand is becoming more pessimistic. Its latest forecast, published earlier this month, shows demand remaining almost 4.5 million barrels a day, or 4.5%, below last year’s level in the fourth quarter. That’s twice the loss it foresaw last month.