Jim Armitage: Oil glut’s a headache

There’s a pretty good chance the hangover for BP’s rejoicing investors will come around fast.

Sunday’s Doha meeting of oil-producing countries promises to bring disappointment to those hoping for a further rally in the price of crude.

Even if they agree to freeze output, it will barely register on the oil price, given the glut of the stuff we already have. By the industry’s own estimates, if they stick at January’s levels, producers will still be pumping a million barrels a week more than the world needs.

There’s some hope from today’s Chinese data that demand for oil might rise. If you believe the official numbers (you shouldn’t), factories there are getting busier.

But most of that seems due to artificial central bank stimulus and debt rather than any fundamental improvement in the economy.

Call me old fashioned, but I’d rather see a real, underlying recovery in Chinese appetite for goods and services before calling an end to the slowdown.

We’re not there yet.