OPEC dismissed from their meeting late Tuesday night Eastern time and promptly said they had decided to cut production by over 500,000bpd.
I’m not sure how to react- first and foremost I feel that OPEC is unaware of global economic worries based on the high cost of oil. Secondly, I think they fail to realize that cutting production now will mean more demand destruction for oil (based on continued higher prices as global stockpiles fall). Are they shortsighted because oil has fallen from an all-time high? Or are their budgets getting so large they can’t afford to sell oil any cheaper?
I’ve maintained in my mind that OPEC seemingly ALWAYS makes the wrong decision at their “meetings”.
Chalk it up to another day long victory for OPEC countries… followed by continued losses in oil. OPEC is signaling that demand is dropping by cutting production- its like they’re recognizing the problem. Could this help oil’s selloff accelerate?
Pfft- so much for them being concerned that high oil prices are hurting the economy.
OPEC’s decision again makes absolutely no sense.