Crude falls despite a supply cut extension, and the demand signal is the reason
Producers extended cuts through the next quarter. Prices fell anyway, which tells you what the market is worried about.
West Texas Intermediate fell 2.1 percent even as major producers confirmed their supply cuts would be extended into the next quarter.
A supply cut that fails to lift prices is informative. It means the market has decided the demand side is the binding problem, and no plausible supply restraint changes that.
What the demand data shows
Chinese crude imports fell for a second month. European refining margins have compressed to the low end of their five-year range. US gasoline demand is running slightly below the seasonal norm.
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