[Skip to the end]
Saudi Oil Output
The Saudi production increase tells me world demand was up, even at the higher prices.
Yes, US demand was down 800,000 bpd vs last year, and yes other world demand may fall.
Only when demand for Saudi output falls sufficiently will they be dislodged from being swing producer and price setter.
That is not to say they won’t continue to disguise their role as best they can, and allow volatility as various world inventory positions (cash and futures) are being liquidated, as is probably the case currently.
Saudi output is also getting very near capacity of maybe 11 million bpd.
If demand goes above that they lose control of price on the upside.