In Focus: Demand may cap oil price

The benefits of Opec’s agreement to cut output have proved elusive. With less than three weeks to go before the group’s next meeting, something is very, very wrong as far as oil producers are concerned.

And they have no easy solution to put it right. The oil price is not far off where it was in November before Opec and friends agreed to cut output. Brent briefly fell to within 30c a barrel of its pre-meeting price last week.

Even without that brief dip, Saudi Arabia is now earning less from its oil sales than it was before concluding a deal that was meant to kick prices up to $60 a barrel. The rapid recovery in US oil production is eroding the effectiveness of the plan.